Cold Storage. Hot Costs. Why Energy is Eating Into Your Bottom Line

From sky-high power demand to outdated infrastructure, cold-storage facilities face mounting energy challenges. Fortunately, innovative efficiency upgrades and renewable energy solutions can slash costs and boost resilience.

Challenges currently facing cold storage operators.

Sky-high Power Demand

Cold-storage facilities are up to 10 times more energy-intensive than ambient warehouses, consuming 25 to 85 kWh per square foot per year, depending on temperature settings and product types. Refrigeration accounts for 60–80% of total energy use in these facilities, often running continuously to maintain frozen or chilled environments. Lighting, fans, conveyors, and HVAC systems are major energy consumers, particularly in large, multi-zone facilities.

According to Star Energy Solutions, the cold storage industry’s annual energy consumption tops $30 billion—a significant portion—

Aging Infrastructure & Inefficient Design

Aging equipment, insufficient insulation, and legacy control systems can result in higher energy costs than newer or optimized counterparts. Many cold-storage facilities were built 20 to 40 years ago—more than 78% were built before 2000—well before many energy codes and modern efficiency technologies.  Energy expenses can account for up to 60% to 70% of a cold-storage facility’s total operating costs, making energy one of the most significant controllable expenses. Up to 30% of a building's total energy spend can be wasted due to inefficiencies. The U.S. Department of Energy (DOE) estimates that energy efficiency improvements could reduce total energy usage in cold storage by 20–30% without sacrificing performance.  As demand for refrigerated logistics grows, so does the pressure on outdated infrastructure.

Thermal Losses

Temperature control in cold storage is constantly threatened by air infiltration—especially at loading docks, access doors, and poorly sealed joints. Recent ACEEE studies show up to 50% of refrigeration load comes from infiltration at dock doors and other openings. Even minute gaps in door seals and insulation can lead to massive energy losses over time, especially in high-turnover logistics environments. Each time a door is opened, cold air escapes while warm, moist air enters—leading to condensation, frost buildup, and increased compressor load.

High-performance insulated doors can reduce energy loss by 20–40%, especially when coupled with proper sealing and automation. Facilities with air curtains or vestibules at dock entrances can reduce infiltration losses by up to 80%, improving thermal stability and compressor efficiency.

Rapid Cycling and Constant Temperature Maintenance

Maintaining consistent temperatures 24/7 across multiple zones, from deep freeze to chilled storage, significantly strains refrigeration and energy systems. Cold storage must often maintain –10°F to –20°F (–23°C to –29°C) in freezer zones and 33°F to 41°F (0.5°C to 5°C) in chill zones—with little to no deviation allowed.

Frequent cycling from loading/unloading and robotic automation increases internal heat load and leads to compressor short cycling, reducing efficiency and equipment lifespan. Automation can increase airflow disruption, contributing to up to 15% more energy draw if not properly integrated with HVAC and refrigeration systems.

Rising ambient temperatures and poor zoning controls add to the need for constant temperature maintenance. As a result, many facilities are turning to predictive controls, thermal sensors, and AI-driven energy management to maintain stability and reduce operational peaks.

Environmental and Sustainability Pressures

Nearly every part of the cold chain—from post-harvest chillers and refrigerated trucks to shipping containers and industrial cold storage—uses vast amounts of energy to keep food fresh. When that energy comes from fossil fuels, the emissions add up fast. In 2018, refrigeration used almost 5% of the world’s energy, producing 2.5% of total global emissions.

As the global focus on climate change intensifies, cold-storage companies face mounting pressure from regulators, customers, and investors to decarbonize their operations. Refrigerated facilities, which rely heavily on energy-intensive systems and often use high-global-warming-potential (GWP) refrigerants, are now in the spotlight as significant contributors to greenhouse gas emissions. In the U.S., states like California have adopted aggressive climate mandates, including laws to phase out high-GWP refrigerants and introduce building performance standards.

Leading retailers and food suppliers are pressuring their cold-chain partners to provide transparent sustainability data and reduce Scope 1 and 2 emissions. Companies that lag behind risk losing preferred vendor status or future contracts. As a result, facilities that reduce emissions, improve energy efficiency, and incorporate on-site clean energy are more cost-effective—they’re better positioned for ESG compliance, brand reputation, and future-proofing as climate regulations tighten.

The takeaway: what was once considered “nice to have” is now mission-critical. Cold-storage operators who proactively address environmental performance will avoid regulatory penalties and gain a competitive edge in an increasingly climate-conscious economy.

Solutions to Slash Energy Consumption

Cold-storage facilities may be energy-intensive by nature—but they’re also rich with improvement opportunities. Upgrading to advanced control systems, optimizing compressor and evaporator performance, switching to high-efficiency lighting, and installing on-site energy generation can deliver significant savings with fast payback.—all while boosting overall facility performance.

Optimize Compressors

Cold storage compressors are notorious energy consumers. Optimizing their performance can significantly improve refrigeration efficiency and cut costs.

• One simple step is adjusting set points—lowering the head pressure and raising the suction pressure within safe limits. This reduces the compression ratio, lowering energy use, with a typical payback of one to five years.

• Matching compressor operation to the facility’s refrigeration load is also key. Running one or more compressors at full load while using an efficient part-load compressor as a trim unit can save significant energy. Installing compressors with different capacities and using programmed controls can further boost staging efficiency. In multi-compressor systems, a reciprocating compressor with cylinder unloading often works best as a trim unit, since it can better handle varying loads than screw compressors without VFDs. Adding VFDs to screw compressors that run at part load can also improve efficiency.

• A two-stage refrigeration cycle—though more expensive upfront—can cool different temperature zones more efficiently, improving overall system performance for facilities with separate freezer and cooler spaces.

Automate Building Controls:

Building automation systems (BAS) play a key role in improving efficiency and operations in cold storage facilities. They connect refrigeration, HVAC, lighting, and security into one centralized platform. By automating and monitoring these systems, facilities can lower energy use, maintain precise temperature control, enhance safety, and streamline daily operations.

• Refrigeration control systems range from simple programmable logic controllers (PLCs) to advanced full-system controllers. Their main job is to optimize the refrigeration cycle and manage key settings to boost energy efficiency.

• Localized PLCs fine-tune individual components in real time for maximum performance. At the same time, centralized control systems oversee the entire operation, coordinating all parts to reduce energy use and improve overall system efficiency.

Boost Evaporator Efficiency

Evaporators in industrial refrigeration systems use much energy, but several strategies can improve efficiency.

• Adjusting the floating suction pressure set point can boost compressor performance and save energy. Cleaning evaporator coils regularly improves heat transfer and can pay for itself in weeks. Adding controls to cycle constant-speed fans on and off reduces run time and energy use.

• For spaces with changing cooling needs, installing Variable Frequency Drives (VFDs) on evaporator fans automatically adjusts the fan speed, optimizing performance and delivering payback in one to four years.

Improve Building Envelope & Sealing

Improving the building envelope of a cold storage facility—including the walls, roof, and foundation—can significantly reduce energy use by minimizing heat gain and air leaks. Better insulation and sealing help maintain stable temperatures inside, reducing the workload on refrigeration systems and leading to lower energy bills. Tactics to cut energy waste by improving the building envelope include:

• Conduct a thermal loss assessment.

• Upgrade insulation and seal all walls, ceilings, and floors tightly.

• Apply weather barrier coatings.

• Upgrade windows

• Install high‑speed, high‑R‑value doors with tight seals to cut infiltration dramatically.

• Manage loading docks smartly. Keeping doors closed when unused and retrofitting seals reduced cooling loads by up to 59% in one study.

• Improve roof performance

Upgrade to Energy‑Efficient Lighting & Controls

Upgrading to high-efficiency lighting in cold storage facilities cuts energy use and reduces heat output, easing the load on refrigeration systems.

Switching to LED lighting is one of the best options. LEDs use far less energy, perform well in cold temperatures, and give off minimal heat. Thanks to their quick restrike capability, they’re ideal for freezers or areas where lights switch on and off often. Another improvement is replacing High-Intensity Discharge (HID) lighting with high-bay T5 or T8 fluorescents, which can be up to 50% more efficient and emit much less heat.

Adding occupancy sensors in rarely used areas can reduce lighting energy use by up to 75%. Aisle-specific controls let facilities group goods by retrieval schedules, minimizing both lighting time and refrigeration strain. Optimizing sensor coverage, using photo sensors to shut off lights where natural daylight is available, and adjusting timers to shorten operating hours can all boost efficiency and lower costs while promoting sustainable operations.

Fine-tune Set‑Points

By adjusting temperatures based on occupancy, time of day, and product requirements, facilities can avoid overcooling and reduce the load on refrigeration systems. This lowers energy costs, extends equipment life, and helps cut greenhouse gas emissions.

• Consider raising freezer temperatures from deep freeze (–18 °C) to a slightly warmer –15 °C when safe—research shows it can lower energy by approximately 10–12% without compromising quality.

Leverage Renewable and Recycled Energy

On-site energy generation helps cold storage facilities cut energy costs and improve reliability. Solar panels generate clean electricity to power refrigeration and other systems, while batteries store excess energy at night, during cloudy periods, or when demand is high. This reduces reliance on the grid, lowers demand charges, and provides backup power, boosting cost savings and energy resilience.

• Solar PV and battery storage (especially on roofs or grounds) can reduce grid reliance, cut utility costs up to 35%, and usually pay back in around five years.

• Waste heat recovery, or combined heat and power (CHP), can recycle wasted thermal energy into electricity or warm air, boosting overall energy efficiency.

• District cooling networks, particularly in urban areas, can significantly reduce electricity use—for example, up to 90% savings when drawing from seawater or waste heat.

One Final Note

Alco Building Solutions stands ready to guide cold-storage operators through this transformation—implementing innovative insulation, high-performance doors, energy-efficient lighting and controls, installing solar + battery storage, and advanced energy management systems.

We are fully committed to helping your facility reduce energy consumption and lower operating costs, while transitioning smoothly to a clean, sustainable energy future—all while safeguarding your bottom line.