HVAC efficiency can help ease pressure on power grids as AI drives up electricity demand.
Artificial Intelligence (AI) is changing the way the world uses electricity, and it’s drawing attention to a much older problem. Across offices, hospitals, schools and retail spaces, heating, ventilation and air conditioning (HVAC) systems consume a significant share of building energy consumption, even when large areas sit empty or equipment runs inefficiently.
For years, much of that waste was accepted as part of doing business. Today, growing pressure on power grids due to the AI boom is forcing governments and building owners to rethink that assumption.
HVAC’s Outsized Energy Footprint
HVAC systems account for around 40% of total building energy consumption, making them among the biggest energy users in commercial buildings. However, not all of that energy is used effectively. An industry analysis in June 2026 estimates that facilities lose 15% to 30% of HVAC energy due to avoidable issues, many of which go unnoticed until utility bills begin to climb.
Aging equipment, poor maintenance, inefficient system design and similar problems usually develop gradually. They make waste difficult to spot without detailed monitoring. Another big challenge is that many buildings still operate according to fixed schedules rather than actual occupancy. It’s estimated that the average commercial building reaches only about 50% peak occupancy, but many HVAC systems continue heating or cooling the entire building as if every space were in use.
For example, schools may only welcome students for about 180 days a year. However, climate control typically operates year-round. Retail buildings can face a similar issue, as many maintain the same indoor conditions regardless of customer traffic. Since these systems operate daily in offices, schools, hospitals and retail spaces, even modest improvements can translate into significant energy savings.
How AI Is Putting More Pressure on the Power Grid
The AI boom means that more organisations are adopting the technology at scale, yet it can be energy-intensive and require significant grid expansion. The International Energy Agency (IEA) estimates that data centres consume approximately 415 terawatt-hours (TWh) of electricity globally, representing about 1.5% of total global electricity use.
Part of that demand comes from keeping powerful servers cool. In many facilities, cooling has historically made up as much as 40% of a data center’s total power use. This places data center cooling efficiency high on operators’ priority lists. According to the Massachusetts Institute of Technology (MIT), data center electricity consumption could reach 1,050 TWh by 2026. “[This] would bump data center up to fifth place on the global list, between Japan and Russia, experts wrote in MIT News.
The growing demand contributes to the discussion about the environmental impact of AI data centres. While operators are investing in more efficient infrastructure and cleaner energy sources, rising electricity costs can increase carbon emissions where grids still rely heavily on fossil fuels. Governments, utilities and building operators are therefore paying closer attention to reducing energy use wherever possible. Commercial buildings are an important part of that effort because heating and cooling systems can usually be optimised without affecting occupant comfort.
While AI didn’t create inefficient HVAC systems, it exposed how costly those inefficiencies have become. On average, 30% of energy used in commercial buildings is wasted. Moreover, buildings in California are responsible for about 24% of the state’s greenhouse gas emissions. Reducing avoidable energy waste is among the most practical steps that can improve both grid resilience and building sustainability, even if it cannot solve every challenge facing the power grid.
The Common Culprits of HVAC Energy Waste
Energy waste typically doesn’t come from a single major fault. In most commercial buildings, it builds up through everyday issues that may go unnoticed for months or years. Many of these problems are well understood and often preventable. As AI places greater pressure on electricity grids, improving HVAC system efficiency through an energy management system is essential.
1. Improper Sizing
An HVAC system is only as effective as its original design. Oversized equipment cools or heats a space too quickly before properly removing humidity. This short cycling wastes energy, reduces humidity control and increases equipment wear. Systems that are too small face the opposite problem of running almost continuously to keep up with demand.
These issues usually begin during the planning stage when proper Manual J load calculations are skipped or based on outdated assumptions. Taking the time to size a system correctly can improve efficiency, extend equipment life and help avoid costly upgrades later.
2. Outdated Equipment
Some energy waste comes down to age. Equipment that was installed decades ago may still be operating, but that doesn’t mean it’s efficient. Older systems can become more costly to maintain over time, and many building owners continue using them because replacement requires a significant up-front investment.
“If you’re still running with R-22 refrigerant, an option that was phased out in 2010 to make way for R-410A, it’s time to look for a more efficient HVAC system,” says Kaycee Knight, Product Team and Marketing Manager at Ingram’s Water & Air Equipment.
Reviewing the long-term costs of repairs, maintenance and energy use can help building owners determine whether keeping older equipment in service remains the most economical choice.
3. Poor Maintenance
Routine maintenance is a simple way to improve HVAC system efficiency. However, many commercial building owners delay it until equipment fails. Dirty air filters restrict airflow, while fouled coils reduce heat transfer and force the system to work harder. Economisers that remain stuck in the closed position also miss opportunities to use cooler outdoor air instead of mechanical cooling.
Building systems analysis suggests that total HVAC energy consumption can be reduced by up to 30% through regular maintenance, including cleaning thermal transfer components and fine-tuning control systems.
4. Insufficient Insulation and Sealing
Heating and cooling systems cannot operate efficiently if conditioned air escapes before reaching occupied spaces. Gaps around doors and windows allow air to leak outdoors, and poorly sealed ductwork can lose up to 15 % to 30% of conditioned air before it reaches its destination.
Improving insulation, sealing air leaks and repairing ductwork can reduce unnecessary energy use without replacing major equipment. These upgrades also help maintain more consistent indoor temperatures throughout the building.
5. Schedule Misalignment
Numerous commercial buildings still rely on fixed operating schedules that assume full occupancy during standard business hours. Heating and cooling may continue overnight, on weekends or during holidays simply because the controls have never been updated. As hybrid work becomes more common, these outdated schedules can waste significant energy.
Installing an automated HVAC system can help align energy use with actual occupancy. “Automated HVAC systems enable demand-controlled ventilation, adjusting heating and cooling depending on the number of people in the room. The smart system can automatically detect if the room is vacant and minimize fresh air to save energy,” writes Olivia Elsher in a Renovated article.
Even a programmable thermostat can help. Adjusting the temperature by 7° to 10° Fahrenheit, or -13.89° to -12.22° Celsius, for eight hours a day can save up to 10% annually on heating and cooling costs.
How Buildings Are Cutting HVAC Energy Use
Many of the tools needed to reduce HVAC energy use already exist. Building owners are finding new ways to improve performance by using better data, smarter control and policies that support energy efficiency. The following examples of commercial building energy management illustrate how different methods can deliver good results.
Using Real-Time Occupancy Data
R-Zero announced in June 2026 that its Physical AI platform cut HVAC energy use by 30% at a 521,000-square-foot children’s hospital. The system combines real-time occupancy data with automated control decisions, and it has saved more than 23,000 kWh of electricity and avoided 9.72 metric tonnes of carbon dioxide emissions. Throughout the project, occupant temperature satisfaction remained at 100%, and no existing HVAC equipment had to be replaced.
Rewarding Energy Savings
The Canadian province of Ontario has launched a Peak Performance Program that offers financial incentives to commercial and institutional buildings for reducing HVAC loads during peak electricity use. Buildings that can reduce an average of 1 megawatt over the 2026 season can earn about CA$75,000. This encourages organisations to ease pressure on the power grid during peak demand.
Setting Higher Standards
California’s 2025 Energy Code, which came into effect on January 1, 2026, introduced stricter rules for HVAC replacements. These include mandatory HERS verification, tighter duct leakage standards and proper load calculations before new equipment is installed. The code helps buildings perform more efficiently from day one.
Why Building Owners Haven’t Fixed This Already
The rapid growth of AI has brought renewed attention to energy efficiency, and many of the solutions are already available. However, putting them into practice can be challenging. One reason is that many building owners still lack the information they need to act. A monthly electricity bill shows how much energy a building uses, but it rarely reveals where waste is happening or which equipment is responsible. Without detailed monitoring, inefficient systems can continue operating unnoticed for years.
Cost is another barrier. Many upgrades require up front payment, even if they can reduce energy bills over time. In some commercial buildings, owners pay for equipment improvements while tenants cover utility costs. This makes the financial return less obvious. Older building automation systems can also limit the data needed to identify the best opportunities for improvement.
The need for electricity is expected to keep rising alongside AI adoption, so avoidable HVAC waste is harder to ignore. Improving efficiency can help lower operating costs, free up electricity and ease pressure on power grids, all while supporting growing demand from AI, businesses and communities alike.
The Urgency Isn’t Artificial
Improving commercial building energy management likely will not solve every challenge facing the power grid. However, it offers an immediate opportunity to significantly reduce waste, lower emissions and improve resilience.
About the Author
Rose is the managing editor of Renovated and has been writing in the construction, landscaping and sustainable building sectors for over six years. She’s most passionate about improving environments, reducing carbon footprints and incorporating resourceful methods to promote well-being in the planet. For more from Rose, you can follow her on Twitter and connect on LinkedIn.