Realizing Energy Transition in the US: strategies for industrial customers in the time of rising costs and grid constraints

Highlights

• As power costs rise and grid stress increases, industrial users are turning to smart building controls, automation, and predictive maintenance to reduce energy demand and improve resilience. These systems not only cut costs, but also prepare businesses for a more complex energy future.
• Despite growing commitments to fleet electrification and energy efficiency, real-world implementation is held back by grid constraints and long project lead times. Businesses are addressing this by combining energy conservation with modular infrastructure and local energy sources like solar and batteries.
• More than just products, customers now expect full-service energy solutions — from financing and permitting support to digital monitoring and guaranteed performance. Those who take a long-term, collaborative approach are building stronger, more repeatable customer relationships.

As U.S. industrial and commercial players pursue decarbonization, the energy transition is no longer just about renewables, it’s about readiness. Readiness for electrification, digitalized energy management, and above all, for a future where energy costs, reliability, and regulatory expectations are shifting faster than ever.

Between now and 2050, U.S. electricity demand is projected to increase by 78%, with a 25% rise expected by 2030 alone (source: ICF sees 25% load growth by 2030, up to 40% price increase | Utility Dive). Yet grid capacity isn’t keeping up the pace. From 2018 to 2023, the U.S. added an average of just 40 GW of new generation annually, half of what’s required through 2045 to meet demand (source: Electricity demand to rise 78% by 2050, study says). Even with 80 GW added in 2024 (source: U.S. Demand Growth Forecast | ICF), permitting bottlenecks, long project timelines (5–7 years for gas plants), and rising AI-driven loads, all raise a critical question: Can industrial users rely on the grid?

Core strategies for industrial energy readiness

Let’s break down what leading players are doing to navigate this transition across four core areas: smart building systems, Electric Vehicle (EV) charging, LED lighting retrofits and infrastructure upgrades, and OEMs collaboration.

1. Smart building controls are the frontline of Energy Transition

The best kilowatt-hour is the one you never use. In high-impact sectors like HVAC, refrigeration, and lighting, the U.S. market is seeing accelerated investment in smart controls, IoT-based systems, and grid-interactive building technologies.

The U.S. building automation and control systems market is projected to grow at a CAGR of 11.9% through 2034 (ExpertMarketResearch), while U.S. HVAC investments are expected to grow at 6.9% CAGR through 2033 (Grand View Research). Key growth drivers for this are:

• New refrigerant and energy efficiency standards (e.g., SEER2, AWEF).
• Indoor air quality (IAQ) and cybersecurity requirements.
• The demand for predictive maintenance and resilient design amid increasing power reliability concerns.

Successful Original Equipment Manufacturers (OEMs) are enabling system-level intelligence: Buildings that respond to peak grid load, optimize consumption, and integrate onsite energy like solar, Battery Energy Storage Systems (BESS) , or microgrids. Industrial users are increasingly selecting suppliers that can meet not just today’s, but future digital and energy requirements.

Are you looking for energy finance solutions? Meet us at RE+ in Las Vegas on September 8-11 to find out how we can work together. Contact us today.

2. EV Charging: readiness trails ambition

Despite public commitments, EV charging infrastructure in the U.S. is lagging. North America is forecasted to build just 15% of China’s EV charging network by 2029, and the U.S. is less than half the pace of Europe (BNEF via Transport Topics). Additionally, federal subsidies have been reduced and set to expire sooner than previously planned. Meanwhile, grid constraints make high-power charging deployments a long-lead process as allocating new capacity can take years in some regions.

Smart OEMs and energy integrators are addressing this gap with modular, expandable systems. They’re designing EVC infrastructure that includes:

• Hybrid Battery Energy Storage Systems (BESS) + EV charging hubs.
• V2G (Vehicle to Grid) ready systems for load flexibility.
• Software-defined load balancing.
• Close coordination with grid operators on local capacity constraints.

Still, commercial users must prepare for reality: the power to support fleet electrification may not be available when or where it’s needed. Onsite renewables and local storage are increasingly non-negotiable. A good rule of thumb is to first reduce overall energy consumption through a range of energy conservation measures (ECMs). Once demand is optimized,

alternative supply solutions—such as combined heat and power (CHP), microgrids, solar Photovoltaics (PV), and BESS —can be designed to meet the facility’s reduced energy needs more efficiently and reliably.

3. Energy Efficient building updates: From LED lighting retrofits to insulation improvements

Industrial and commercial buildings are undergoing a wave of energy-efficient retrofits. The most viable and Return on Investment (ROI) positive upgrades in 2024–2025 include:

• LED lighting retrofits with short payback periods.
• Smart control overlays for load optimization.
• Upgrades of HVAC components—chillers, air handlers, packaged rooftop units.
• Window insulation improvements.
• BESS installations for peak shaving and backup (also DER and DR programs to help with ROI).

Heat pumps are a key component of decarbonization strategies, but their high upfront costs continue to pose challenges in many commercial settings. While regulatory pressure is likely to accelerate adoption, the return on investment remains uncertain in the short term. As a result, many investors are currently prioritizing lower-cost, faster-payback solutions, though this may shift as policy incentives and energy prices evolve.

The notable trend to highlight diesel backup systems are being replaced by battery-based or hybrid solutions. This shift supports decarbonization and enables grid support functions like demand response or frequency regulation.

4. OEMs: Step up or miss out

Today’s industrial buyers aren’t just purchasing hardware; they’re investing in long-term energy partnerships. The complexity of modern buildings requires OEMs, and their selling partners to go beyond tech specs:

• Collaborative selling and risk-sharing models.
• Transparency in performance and availability guarantees.
• Predictive maintenance enabled by IoT, AI, and twin plant models.
• Services structured around measurable outcomes, such as performance-linked service contracts or energy savings-as-a-service.

OEMs that focus only on short-term CAPEX miss the opportunity to deliver lifetime value. Those that help users navigate permitting, financing, and systems integration earn trust, and that’s how they will be winning repetitive business.

2026 Outlook: Be smart. Be flexible.

Looking ahead to 2026, the U.S. power landscape is likely to only get more complex. Industrial buyers should prepare for:

• Continued grid stress and regional variability in energy availability and cost.
• A surge in AI-driven load from data centers.
• Skills shortages in HVAC, electrical, and systems integration—partly addressed by recent federal apprenticeship programs (e.g., OBBBA Act).

What may be the best move? To upgrade your energy management system now and make it smart, data-driven, and expandable. A smart system is the backbone of future business flexibility.

Capital Considerations: Financing for Resilience

Energy planning isn’t just about hardware; it’s about financial resilience. As cost variability and grid uncertainty increase, companies must:

• Quantify the value of uptime, resilience, and avoided revenue loss.
• Capture value from load reduction and on-site renewables.
• Seek financing that reduces long-term energy cost volatility.

Look for financing partners who: ·

• Provide Energy Transition sector-specific expertise.
• Support multi-phase investment plans triggered by ROI hurdles.
• Understand the meaning of long-term partnership and can support you in your Energy Transition journey in the future.
• Are fully transparent about the rates and terms they offer. Many project finance structures obscure true costs through complex repayment mechanisms. Always evaluate the total cost of ownership over the full financing term. Straightforward leases or loans with low interest rates and flexible terms often outperform programs that embed double-digit interest rates in less visible ways.

Final Thought

In a landscape of rising costs, complex regulation, and increasing electrification, smart infrastructure isn’t a luxury; it’s a necessity.

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