Are you a car dealership owner or manager looking to cut unnecessary expenses and boost your bottom line? This guide is specifically designed for car dealership owners and managers who want to reduce energy costs through targeted audits and efficiency upgrades. Auto dealerships are among the largest consumers of electricity in the commercial sector, with significant energy demands for lighting, security, HVAC, office equipment, repair tools, car wash equipment, compressors, paint booths, and more. Paint booths, in particular, require high volume airflow for effective operation, which contributes to their significant energy use. Additionally, the frequent movement of vehicles in and out of the facility, especially through bay doors, contributes significantly to overall energy use. Bay doors can increase heating and cooling loads if left open, leading to higher energy costs. The parking lot is also a major area of energy use, especially due to outdoor lighting and security needs. Upgrading parking lot lighting with energy-efficient solutions can enhance security and reduce energy costs. Reducing energy costs can significantly improve a dealership's bottom line and support sustainability goals.
Auto dealerships consume about 110 kBTU per square foot, which is more than typical office buildings.
The majority of these usages are vital to the daily operations and services that car dealerships offer, so cutting back on use to save money isn’t an option. Auto dealerships use more energy per square foot than a typical office building, consuming about 18% more energy than typical office buildings at approximately 110 kBTU per square foot. In fact, vehicle dealerships consume about 116 megajoules per square foot, compared to 98 megajoules per square foot for prime office space, making energy efficiency upgrades even more important. While implementing energy-efficient equipment and facilities when building car dealerships are a big factor in keeping electricity bills low, there are still ways to minimize energy costs.
To understand how you can lower electricity costs, let’s take a look at the average auto dealership electric bill as well as two different types of audits that can save your business money.
How Much Do Car Dealerships Pay for Electricity?
According to data from the U.S. Energy Information Administration (EIA), the median energy usage from vehicle dealerships was around 10 kilowatt-hours (kWh) per square foot per year. With an average floor space of 13,000 square feet at the current national average of $0.16 per kWh, car dealerships can expect to spend more than $20,000 per year on electricity bills.
Utility bills are a significant ongoing expense for dealerships, making it important to evaluate how much energy is being consumed and where savings can be made. Of course, it is difficult to accurately estimate how much car dealerships spend on electricity bills, as it can vary significantly depending on the size and location of the dealership, as well as the energy efficiency of the building and its electrical systems.
Types of Car Dealership Energy Audits
Two types of audits are at the top of the list when it comes to ways to minimize car dealership electricity bills — energy billing audits and energy consumption audits. Both types of audits aim to reduce energy consumption and lower the average electric bill for an auto dealership, leading to significant energy savings. However, they use different methods to get there.
Implementing energy management strategies and following energy saving tips can further help car dealerships reduce energy costs by optimizing energy usage and improving overall efficiency. Energy management initiatives can help dealerships save money and decrease greenhouse gas emissions, supporting broader sustainability practices. These initiatives can also be leveraged in marketing to promote the dealership's sustainability efforts and attract environmentally conscious customers, partners, and employees. Energy management includes initiatives that proactively manage, optimize, and control energy usage to save money and decrease greenhouse gas emissions.
As much of the electricity usage of car dealerships are such an essential part of the business, changing consumption patterns can be difficult and require some hefty investments. Meanwhile, savings can be found through billing audits without significant upfront costs, so we will mostly focus on the benefits and process of this type of audit.
Car Dealership Energy Billing Audit
Energy providers leave it up to consumers to monitor billing and invoices for errors. However, since most car dealerships don’t have a designated department with expertise in either electric procurement or auditing, many dealers seek third-party help to cut costs. Working with a third party like P3 Cost Analysts is your best bet.
During an energy billing audit, P3’s team of experts will comb through your electric utility invoices and contracts to find savings for your car dealership. These audits review all types of utility bills and energy sources, including electricity, water, sewer, and natural gas, to identify potential savings.
It is up to business owners to locate the errors, overcharges, and other mistakes that often fill monthly statements. These can be difficult to spot due to the complicated nature of invoices. Another aspect that must be double-checked is the energy tariffs that are applied to ensure they are correct and offer the lowest prices.
Energy billing audits for car dealerships are not focused on minimizing usage. While this is also an important aspect of saving money, it typically comes with expensive upfront costs. At this stage, we won’t recommend expensive technology that will lower usage. Instead, we offer billing audits with no upfront costs and simply share in a portion of the savings that we find for your business.
Additionally, auto dealerships can save money on energy efficiency projects through available rebates and incentives, which help reduce the cost of these projects and improve return on investment.
Benefits of a Car Dealership Energy Billing Audit
The ultimate goal of an energy billing audit is to lower your average car dealership electric bill. Here are the top perks of working with P3 Cost Analysts to lower your monthly electricity costs:
Negotiating Better Energy Rates
The first step is determining if your car dealership operates in a regulated or deregulated energy market. Those fortunate enough to be in a deregulated market can create competition among suppliers by shopping around for the best rates.
When we conduct an energy billing audit, we will compare your current rates with other car dealerships in your area to make sure you’re getting prices consistent with industry standards. P3 has valuable industry insight on nationwide pricing data that helps us guarantee you’re not overpaying.
Additionally, working with reputable manufacturers for energy-efficient equipment—especially those with ENERGY STAR certification—can further reduce energy costs and improve operational performance. ENERGY STAR certified products, such as lighting, HVAC systems, and EV chargers, not only help lower energy consumption but also demonstrate your dealership’s commitment to environmental responsibility. For example, all ENERGY STAR certified EV chargers use 40% less energy than a standard EV charger in standby mode, providing significant savings over time. Viewing the audit process as an investment in your dealership’s long-term efficiency can maximize these benefits.Correcting Overcharges and Billing Errors
In addition to securing the best rates, auditors will examine past and current invoices to locate errors, overcharges, and unauthorized fees that may have gone unnoticed. These discrepancies must be demonstrated to your supplier to request the appropriate refunds.
Every effort should be made to thoroughly review and correct billing errors, as diligence in this process is essential to reduce energy costs in car dealerships.Qualifying for the Correct Energy Tariffs
Understanding energy tariffs requires the expert experience that your team of auditors possesses. Energy tariffs are complicated and misunderstood by most business owners, so working with a company like P3 Cost Analysts is invaluable.
Your auditors can make sure that your car dealership is functioning under the tariffs that supply you with the lowest pricing and will lower your average auto dealership electric bill.
Car Dealership Energy Consumption Audit
Another type of audit that can help lower the average electric bill for an auto dealership is a consumption-based audit. This process involves establishing usage patterns and locating areas where efficiencies can be improved.
Recommended Upgrades
Common recommended upgrades include:
Upgrading HVAC equipment
Installing efficient lighting such as LED lighting
Improving insulation
Updating light fixtures
Adding programmable thermostats
Evaluating compressors
Optimizing heating and cooling systems
Lighting upgrades, especially LED lighting, can significantly reduce energy consumption, improve aesthetics and safety, and require little maintenance. Proper lighting and environmental conditions can also enhance the presentation of inventory, attract customers, and improve sales potential.
HVAC improvements, including heating upgrades and programmable thermostats, can enhance comfort for customers and employees while reducing energy consumption and costs. Programmable thermostats can help reduce energy costs by allowing temperature adjustments during off-hours, and installing smart or programmable thermostats can save approximately 10% annually by managing temperatures during unoccupied hours.
Regular maintenance of compressors and keeping bay doors closed when not in use also help maintain energy efficiency. Compressors in dealerships consume energy at different rates, and selecting the right type can lead to savings. Regular maintenance of compressors is essential to ensure they operate efficiently and consume less energy.
Additional Strategies
When considering recommended upgrades, look for ENERGY STAR certified products to maximize energy savings and reduce energy consumption. Implementing these energy management initiatives can help dealerships save energy, decrease greenhouse gas emissions, and potentially reduce energy costs by at least 20%. Energy management is an ongoing process that should continually evolve to encompass new actions and assess results.
Additional strategies include installing solar panels or solar energy systems, which can offset a significant portion of a dealership’s power needs, protect against utility rate increases, and support sustainability practices that benefit the environment. Rooftop solar panels can offset a significant portion of a dealership's power needs, with some achieving 90% grid-neutral status. Solar PV installations can help dealerships achieve grid-neutral energy status by generating their own renewable energy. Solar energy solutions can help auto dealerships operate during power outages. A custom designed solar PV system can reduce operating expenses for auto dealerships. Solar energy investments can provide a return by reducing overhead electricity costs for auto dealerships.
Dealerships can also benefit from new technologies such as EV charging stations, EV chargers, and electric vehicle supply equipment (EVSE) for both employees and customers. Using local load management allows power to be shared efficiently between chargers and enables scheduling for off-peak hours, further reducing costs.
Many companies specialize in these consumption-based audits, but the solutions they come up with are often capital-intensive. For example, they often recommend cutting-edge technology that comes at a high price.
Car dealerships with a budget for this process should consider an energy consumption audit. However, whether you opt for this step or not, it should be paired with a billing audit for maximum savings.
P3 Cost Analysts' Audit Process
When you entrust P3 Cost Analysts with your billing audit, you can rest assured that we've spent countless years perfecting the process. It will look something like this:
Step 1: Engagement
During the engagement phase, we take a deep dive into how our shared savings agreement works and provide details of how to move forward. We will also outline all necessary materials needed for the audit, from invoices to authorization documents and contracts.
Step 2: Onboarding
By gathering invoices from the last 12 to 36 months during our onboarding phase, we can identify all the potential savings opportunities for your car dealership. We'll ensure you get maximum savings by going as far back as permitted by your state's statute of limitations.
Step 3: Audit
Our energy billing audit delves deep into your invoices to uncover any fees, errors, or overcharges that could be costing you money. Thorough yet timely analysis ensures that savings begin as soon as possible. Typically we release our findings in 4-6 weeks and then implement savings within another 4-6 weeks after that.
Step 4: Ongoing Auditing
Moving forward, we will continue to monitor invoices monthly to ensure your savings stay intact and no new overcharges appear on your billing.
Car Dealership Energy Billing Audit Case Study
You know you can trust P3 to help lower your average car dealership electric bill because we've done it before! For example, one of our long-standing clients is a regional automotive dealership that has nine locations in total. With so many venues, they realized the benefit of having a third party manage their waste, telecom, and utility expenses.
Right off the bat, we identified overcharges on their current monthly invoices. We fought hard to receive over $30,000 in cash refunds due to utility and telecom billing errors. In the seven years we've worked together, they've seen over $200,000 in waste, telecom, and utility savings.
Reduce Your Car Dealership's Energy Bill Today
Business owners looking to lower the average electric bill for a car dealership must implement an energy billing audit. This process entails a team of experts examining invoices for overcharges, errors, and other savings opportunities. It will also determine if your car dealership is functioning under the proper tariffs, which is essential for lowering costs.
While an energy billing audit can be done in conjunction with a consumption-based audit, the former offers solutions at little to no upfront costs to you. Meanwhile, consumption-based audits come up with capital-intensive solutions.
When you're ready to conduct an energy billing audit for your car dealership, the team at P3 Cost Analysts is here to help. Schedule a free expense audit today!
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