Part 3 in a series focused on the strategies and trends that energy utility companies are offering, and the benefits customers can achieve by adopting them.

The magnitude of energy consumption by buildings is staggering. These smart capabilities help solve the problem.

We started exploring the state of the U.S. utility market in Part 1 and Part 2 of this series, where we delved into the various strategies utility companies employ to reduce energy demand and stress on the grid. Now we turn our attention to the building sector, and more specifically, the magnitude of energy that buildings consume. The U.S. Department of Energy’s report from 2015 illustrates the challenge and opportunity facing customers and utilities.1

  • The buildings sector accounts for about 76% of energy use and 40% of all U.S. primary energy use.
  • HVAC systems account for 35% of total building energy consumption.
  • By 2030, building energy use could be cut more than 20% using technologies known to be cost-effective today, and by more than 35% if research goals are met.

Newer technologies. Greater energy savings.

The impact of the environment and the corresponding regulation are pressing concerns for business owners and stakeholders who are under increased scrutiny to operate more efficiently. There are several newer technologies that businesses are adopting to improve energy efficiency in buildings.

The upgrade to light-emitting diode (LED) lighting has resulted in large reductions in energy demand across a utility’s territory with businesses enjoying a quick payback. The most efficient LEDs use only 20-25% of the energy of traditional incandescent light bulbs and can last more than 20 years.2

Smart buildings
Controlling building systems such as lighting and HVAC (heating, ventilating, and air conditioning) to accommodate changes in weather, building occupancy, and space utilization is another key measure that is helping businesses reduce their energy consumption. We are now seeing a shift towards smart buildings that utilize Internet of Things (IoT) capabilities to monitor, automate, and optimize systems through cloud-based technology, artificial intelligence (AI), and machine learning.

An advanced building energy management system (BEMS) on its own can save anywhere from 13-66% on energy, depending on its level of diagnostics, historical analysis, and predictive capabilities3. In addition to reducing energy use, smart buildings achieve additional benefits that include improving comfort and the working environment, which leads to better employee productivity. Analytics supported by big data can provide greater insights, allowing for data-driven decisions that take advantage of a host of optimization opportunities, including reductions in HVAC energy usage and costs.

IoT control
There is a growing trend to integrate IoT into the picture. For residential customers, the utility-provided smart thermostats that have been available for years allowed utilities to reduce energy demand when the grid approaches maximum capacity by raising setpoints or cycling air conditioners.

Thanks to continued development of cloud-based capabilities, commercial customers can now purchase thermostats that can be managed on site or remotely. This bring your own thermostat (BYOT) approach includes broader IoT applications beyond just adjusting the temperature in a house.

The proliferation of smart-grid standards are now critical components that impact energy generation, distribution, and consumption. BACnet™ is a standard data communication protocol that enables interoperability between different systems and devices in a building. While equipment attached to BACnet has the functionality for energy management and load control, BACnet can be used to monitor energy consumption and track minimums and peaks in demand. It can also be used to issue pre-programmed response commands to shed energy loads. Similarly, open automated demand response (OpenADR™) has advanced and automated the demand response (DR) process by conveying DR signals from energy providers to consumers, facilitating timely and predictable responses.

Memoori, a smart building research firm, estimates that there will be over 3.3 billion IoT devices installed in commercial office buildings by 2022; three times more than there were in 2017.4 More than three-quarters of the companies responding to a Smart Energy Decisions survey either are using IoT or are planning to implement it for energy management. And this isn’t just to jump on the “smart control” bandwagon. An overwhelming majority cited reducing energy use and cutting capital and operating expenses as key drivers to use IoT as part of their demand side management (DSM) strategy.5

Where HVAC optimization fits in

Customers who have already completed LED lighting upgrades are now looking for the next energy-saving solution that will make a significant impact on their energy consumption and their bottom line. The integration of IoT into HVAC systems offers financial and performance benefits to both utilities and end-users, providing greater flexibility for management of building automation and control networks while avoiding the peak demand issue and unnecessary energy consumption that has plagued both utilities and commercial customers for decades.

IoT applications also address the need for flexibility in HVAC operations, which became apparent when companies either shut down operations or went to work-from-home arrangements due to COVID-19. With cloud-based controls, HVAC systems can be quickly adjusted to account for occupancy, rather than maintaining the preset schedule that was in place from pre-pandemic days.

Encycle’s Swarm Logic® is an example of how commercial and industrial facilities can benefit from internet-based controls for their HVAC systems across an entire enterprise. Its IoT-enabled energy efficiency technology connects via the cloud to the existing building controls – building automation system (BAS), connected thermostats, or IoT platform – turning HVAC rooftop units (RTUs) into smart, networked, energy-responsive assets. And because it is cloud-based, it requires no capital expense for hardware in most cases. It’s a virtual solution for physical equipment.

Swarm Logic’s unique cloud-based software-as-a-service (Saas) technology enables Encycle’s commercial and industrial customers to lower energy costs, maximize efficiency, and reduce environmental impact. Companies using Swarm Logic routinely reduce HVAC energy costs and consumption by 10-20% with little or no capital investment.

Additional Swarm Logic benefits include:

  • Achieves sustainability goals
  • Supports demand response programs
  • Quick and easy to deploy
  • Extends the life of HVAC equipment
  • Minimizes equipment repair and replacement costs
  • Advanced analytics and reporting
  • Scalable for any number of facilities

Looking ahead

As we look at the future of energy, utilities and customers should work together to form commitments that result in greater energy conservation. Adopting innovative technologies and taking advantage of energy-saving programs will provide new opportunities for sustainability and profitability while providing continued improvements in investments and comfort.

If you would like to learn more about how Encycle can help you reduce your HVAC-related energy consumption and achieve greater utility savings, please contact us at +1 855-875-4031.

Contributing author: Chris Hensley, Executive Vice President of Sales and Marketing, Encycle Corporation

1 U.S. Department of Energy, 2015, Quadrennial Technology Review: An Assessment of Energy Technologies and Research Opportunities.
2 Harder, Abby, and Emily Beard. “Energy Efficient Lighting.”, National Conference of State Legislatures , 2 June 2016,
3 “How Smart Buildings Save Energy.” Buildings, Stamats Communications, 1 Nov. 2015,
4 NYSERDA. “The Value of Energy-Smart Buildings: Six Benefits to Consider.”, American City Business Journals, 1 Apr. 2019,
5 Smart Energy Decisions Research, The State of IOT and Smart Buildings, Apr. 2020.

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