Business Overview

Projects for energy consulting companies on a smaller scale include conducting an energy audit of a single-family home. Larger commercial projects include making recommendations for large data centers that use massive amounts of electricity, government organizations with many public buildings, and major national companies with multiple locations.

Energy consulting companies provide energy audit reports to their clients that make specific recommendations for energy conservation and improved efficiency. They also provide information to clients about possible tax incentives for investing in alternative energy systems. Some companies in this sector sell, install, and maintain equipment such as solar panels, wind farms, geothermal systems, and bioenergy projects.

Who is this business right for?

An energy consulting business is a great business for individuals who are environmentally conscious and wish to make an active contribution towards fighting global warming. This is a rewarding business opportunity on many levels for yourself, your clients,and the betterment of the world.

What happens during a typical day at an energy consulting company?

Most of the time you will be on the client's site and spend lots of time investigating the expenditures they make on energy to find ways to save your client’s money and reduce the usage of fossil fuels with alternative energy systems.

While conducting an energy audit of a home, you will be looking for air leaks around the doors and windows, investigating the efficiency ratings of equipment used for air-conditioning/heating and checking the level of insulation. You will spend time in the attics, basements, and even in the crawl spaces, looking for places where improvements are possible. You will take infrared photographs of the entire home, inside and outside, to find energy leaks.

For commercial properties, you will conduct a detailed physical inspection as well as an extensive audit of the financial records related to energy expenditure. One part of the effort is “blue-collar” work in that you will be inspecting equipment, such as heating and cooling systems. You will inspect the entire facility and even go up on the roof. Another part of this business is more “white-collar” work, including accounting and reviewing the energy bills.

When you’re not doing client work, you’ll need to study up to date on the latest technology applicable to energy-savings. Consequently, you’ll spend a lot of time learning about equipment and innovative solutions available by reviewing technical specs and operating manuals.

What is the target market?

Energy consultant companies market their services and products to residential customers and/or commercial businesses. Every business and older home benefits from a comprehensive energy consultant review. The average company wastes 20% or more of the energy expenses because they simply do not know how to reduce the waste. Older homes waste up to 40% on average.

Cleantechnica reports that when including the power creation side of this calculation, the United States wastes 61% to 86% of its energy. Clearly, there are many customers, both residential and commercial, who benefit from using an energy consultant, so the prospects for this type of business are excellent.

How does an energy consulting company make money?

Energy consultant businesses typically charge residential clients a flat fee for an energy audit, which includes a standardized inspection and written report.

For commercial properties, there are two potential ways to charge customers.

  • Charging consulting fees by the hour. If you are able to provide LEED ratings for a building, you can earn more. This requires specialized training and certification.
  • Negotiating a bonus as a percentage of the energy savings achieved based on your recommendations. For this fee, you do a review of the energy usage and give detailed written suggestions about how to improve the situation. Then your recommendations are implemented.

Additional revenue can be earned from commercial and residential customers from selling (with an upcharge), installing, and maintaining energy-efficient systems. Some solar equipment installers finance the costs of installation for their customers and receive an ongoing portion of the monthly energy savings from the reduction achieved in the utility bills.

What is the growth potential for an energy consulting company?

You can start small and help small businesses and/or homeowners to save money. You can get LEED certified, which allows you to make recommendations at a major corporate level. Because the need for energy savings is so great, the opportunity to grow in this business is amazing. This type of business has the potential to grow into a nationwide service, employing qualified workers under the banner of your brand name.

The Vault Company ranks the best energy consulting firms, which include McKinsey & Company, The Boston Consulting Group, Inc., Bain & Company, Accenture, and Schlumberger Business Consulting. The top-ten ranked firms in this industry sector have a combined market capitalization in the many billions of dollars.