Opportunity instead of danger: How small and medium-sized enterprises can drastically reduce their costs with the energy transition

Unfortunately, the current DIHK Energy Transition Barometer has shown once again: many entrepreneurs in Germany view the energy transition with skepticism. Around 36 percent see their competitiveness threatened by high electricity prices. And indeed, prices are a real burden for many businesses, particularly medium-sized enterprises. This does not only affect energy-intensive companies.

It is absolute no wonder that numerous business owners look to politicians, demanding that they take action to lower electricity prices. This desire is partly justified: the energy transition is largely steered by politics. This repeatedly creates inefficiencies that drive prices up needlessly. In addition, there are historically grown fees and special regulations that clearly favor certain power consumers—while many others pay the bill.

However, part of the truth is also that many medium-sized businesses rely too heavily on political solutions. True, politicians need to make adjustments in some areas. At the same time, there have never been so many opportunities that companies can take themselves to significantly reduce their electricity costs. Above all, this requires a willingness to engage with the topic and to explore new paths. In many cases, courage is not even necessary, as the risk is low and the capital requirement is manageable. The key is simply to address it. Interestingly, renewable energies play a key role here.

The following examples do not claim to be exhaustive, but they illustrate how diverse the toolkit of measures has become. Many methods have only become market-ready in recent years—mainly due to falling battery prices or technological progress in the field of Artificial Intelligence. Crucially, no company has to implement these measures alone, hire expensive specialists, or develop their own software. There is now a broad market of service providers who—depending on individual needs—take care of a large part of the implementation.

Diversify energy purchasing

Traditionally, power procurement in medium-sized enterprises is managed through various types of fixed-price contracts, such as tranches. This made sense for decades when the power supply was guaranteed by continuously running power plants and the risks for providers were easier to calculate. With the expansion of renewables, however, the starting situation has changed drastically. Electricity prices are extremely volatile and fluctuate enormously throughout the day. Medium-sized businesses can take advantage of this, but many shy away because they fear the short-term nature of the spot market. Many entrepreneurs believe that volatility threatens security of supply, or in the worst-case scenario, might even stall machines. Yet, electricity purchasing models have nothing to do with security of supply—at most, they relate to price security. Anyone who overcomes this mental hurdle and engages—at least partially—with the spot market, ideally in combination with Power Purchase Agreements (PPAs) from wind and photovoltaic systems, can on average save up to ten percent of their electricity costs.

Measure and diversify consumption

This category can be roughly divided into two areas: Energy Management Software (EMS) and efficiency measures.

Energy Management Software

Thanks to Energy Management Software, energy consumption can be precisely monitored across the company. On this basis, strategies can be developed to reduce or optimize electricity usage. Nowadays, Energy Management Software is no longer just for technicians, but offers several useful data points for purchasing, controlling, management, or even plant operations.

Efficiency measures

Most medium-sized businesses likely think of classic modernizations when it comes to reducing electricity consumption. Such measures are often highly effective but usually involve the highest investment costs. Nevertheless, regular modernization is essential to ensure the company's future viability.

Optimize energy consumption

Most medium-sized businesses likely think of classic modernizations when it comes to reducing electricity consumption. Such measures are often highly effective but usually involve the highest investment costs. Nevertheless, regular modernization is essential to ensure the company's future viability.

Manual flexibility

Here, electricity consumption is optimized based on spot market prices. In other words: during periods of high prices, as little power as possible is consumed and thus purchased. During periods of low prices, the exact opposite is done. A classic example is charging an electric vehicle fleet. The cars do not always need to be charged immediately when employees arrive at work in the morning. Often, this can be shifted to midday when, thanks to solar power, prices are low or even negative. Similarly, some machines or refrigeration systems do not need to run at the same intensity around the clock. However, it must also be said that the potential for flexibility varies greatly from company to company. Quite a few rely on continuous production, or adapting processes to the electricity market is not (yet) financially viable.

Flexibility using battery storage

It is precisely these companies that benefit enormously from battery storage systems. They can be charged during times of low prices and discharged during times of high prices. Companies can even generate extra income here, as the electricity does not necessarily have to be consumed internally but can also be fed back into the grid. Years ago, large-scale battery storage was a costly investment. Today, however, prices have fallen drastically. On average, they pay for themselves in four to six years. However, this requires new capabilities from service providers, because simply optimizing grid charges or self-consumption is not enough to achieve such short payback periods—it all depends on the correct marketing of the storage capacity.

Optimize grid fees

As is well known, electricity costs consist not only of the actual power price but also of grid fees. A lot can be done here as well, especially in the area of peak load shaving. For example, do all machines have to start up simultaneously at the beginning of a shift, or can the process be staggered? The right energy management systems do not only display peak loads but also clearly and vividly show the additional costs of such "old standards," allowing decision-makers to weigh costs and benefits without having to commission external consultants.

Self-generation

Installing your own photovoltaic systems can still be worthwhile for companies, despite ever-decreasing feed-in tariffs and low electricity prices on the spot market when the sun is shining. Especially the combination with battery storage and intelligent controls can make such a setup highly economically attractive.

Conclusion

Medium-sized businesses today have a whole range of measures at their disposal to drastically reduce their electricity costs. There are already examples of companies that have succeeded in dramatically cutting their energy bills.

Business owners who do not make the mistake of simply pointing fingers at politicians, but instead actively search for solutions and remain open to innovative approach, will find numerous opportunities open up to them—not in spite of, but precisely because of, the energy transition.

This article was published on August 14th, 2025 in pv magazine.