Commercial Electricity for Cold Storage in Texas
What a Texas refrigerated warehouse pays for power - where refrigeration is 70-80% of the bill and demand charges can be 30-50% - plus how to lower both.
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Texas has over 130 refrigerated warehouses, and cold storage is one of the most electricity-intensive businesses there is: a refrigerated facility uses about 4x the power of a dry warehouse, and refrigeration alone is 70–80% of the bill. Below is what cold storage uses and pays. See the warehousing & storage and grocery stores guides, or browse all commercial electricity guides by business type.
Key Takeaways
- Refrigerated warehouses run about 25 kWh per square foot per year - 3–4x a dry warehouse.
- A mid-size (~50,000 sq ft) facility uses roughly 100,000–130,000 kWh a month (about $8,300–$10,800 at ~8.3¢/kWh).
- Refrigeration is 70–80% of the electric bill.
- Demand charges can be 30–50% of a cold-storage bill - the biggest lever after refrigeration itself.
- Compressor efficiency, door management, and peak control are where the savings are.
Cold Storage Electricity, by the Numbers
Figures are estimates that scale sharply with facility size and temperature. See methodology below.
Why Cold Storage Costs 3–4x a Dry Warehouse
A refrigerated warehouse has to remove heat continuously to hold product cold or frozen, so its compressors run around the clock. At about 25 kWh per square foot per year - versus ~6 for a dry warehouse - cold storage is in a different league, and demand charges make up an unusually large slice of the bill.
Estimated usage & bill by facility size
| Facility size | Approx. sq ft | Monthly usage | Est. monthly bill* |
|---|---|---|---|
| Small cold store | ~15,000 | 30,000–40,000 kWh | $2,500–$3,300 |
| Mid-size facility | ~50,000 | 100,000–130,000 kWh | $8,300–$10,800 |
| Large distribution | 200,000+ | 400,000–700,000+ kWh | $33,000–$58,000+ |
*Electricity portion at Texas's ~8.3¢/kWh average commercial rate. Freezer (vs. cooler) space and blast freezing push usage higher, and demand charges add substantially.
How does the Texas commercial rate compare?
Texas businesses pay an average of about 8.3¢ per kWh - roughly 38% below the U.S. commercial average of ~13.5¢. Because Texas is deregulated, you can shop the supply portion of your bill across 30+ retail providers and lock in a fixed rate - compare current commercial electricity rates.
Refrigeration Is Almost the Whole Bill
Little else comes close to refrigeration in a cold-storage facility. Compressors, evaporator and condenser fans, and defrost together are the overwhelming majority of the load.
| System | Why it draws power | Approx. share of the electric bill |
|---|---|---|
| Refrigeration compressors | Removing heat to hold cold/frozen temperatures 24/7 | 60–70% |
| Evaporator & condenser fans | Moving air across coils | 10–15% |
| Defrost | Clearing coil frost on cycle | 5–8% |
| Lighting | Aisles, docks, and offices | 4–8% |
| Dock, controls & other | Dock equipment and building systems | 5–8% |
Shares are illustrative; refrigeration and its fans together are roughly 70–80% of the electric bill.
Demand Charges: 30–50% of a Cold-Storage Bill
Most of your bill is energy — the total kilowatt-hours (kWh) you use over the month. But many commercial accounts also carry a demand charge, billed on your single highest peak of power draw, measured in kilowatts (kW), usually over a 15-minute interval. It doesn't matter only how much electricity you use, but how fast you use it at your busiest moment.
How to keep demand charges down
- Stage and sequence compressors so they don't all load at once; use floating head-pressure control.
- Shift defrost and battery charging away from the peak period.
- Manage doors and infiltration - strip curtains and fast doors cut compressor load.
- Consider thermal storage (pre-cooling product) to shave peak demand.
Demand Response for Refrigerated Warehouses
Demand response is a program where businesses agree to reduce their electricity use for short windows when the Texas grid (ERCOT) is under strain — typically late afternoons on the hottest summer days. In exchange, participating businesses earn payments or bill credits.
Where Cold Storage Operators Save
- Lock in a fixed commercial rate. At cold-storage volumes, a well-timed contract is a major lever.
- Upgrade compressor efficiency and controls. Efficient compressors, VFDs, and floating head pressure target the biggest load.
- Tighten doors and insulation. Fast doors, strip curtains, and good insulation cut the heat compressors must remove.
- Manage the demand peak. Sequencing, thermal storage, and off-peak defrost cut the 30–50% demand slice.
- Switch to LED with controls. LED runs cooler and adds less heat for refrigeration to remove.
- Review demand and interval data. Knowing your peak kW shows whether a different rate structure would save money.
Related Commercial Electricity Guides
Frequently Asked Questions
How much electricity does cold storage use in Texas?
Refrigerated warehouses run about 25 kWh per square foot per year - roughly 4x a dry warehouse. A mid-size ~50,000 sq ft facility uses about 100,000 to 130,000 kWh per month, or roughly $8,300 to $10,800 at the state's average commercial rate of about 8.3¢ per kWh, before demand charges.
What uses the most electricity in a cold-storage facility?
Refrigeration dominates - compressors plus evaporator and condenser fans are about 70 to 80% of the electric bill because they run around the clock to hold cold or frozen temperatures.
What is the average commercial electricity rate in Texas?
Texas businesses pay an average of about 8.3¢ per kWh as of 2026, roughly 38% below the U.S. commercial average of about 13.5¢. Your actual rate depends on your ZIP code, utility (TDU), usage, and when you sign your contract.
Why are demand charges so high for cold storage?
Compressors create a large, sustained peak in kilowatts, and at $5 to $35 per kW demand charges can be 30 to 50% of a cold-storage electric bill. Staging compressors, floating head-pressure control, and thermal storage all help reduce it.
How can a cold-storage facility lower its electricity bill?
Upgrade compressor efficiency and controls (VFDs, floating head pressure), tighten doors and insulation, manage the demand peak, switch to LED, and lock in a competitive contract.
What is demand response and can cold storage earn from it?
Demand response pays facilities to reduce use during grid-peak events. Because cold-storage peaks are large, facilities can pre-cool product and briefly curtail or stage compressors during events in exchange for meaningful payments, without risking the cold chain.
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Business count: U.S. Census Bureau, County Business Patterns 2023 - 139 refrigerated warehousing and storage facilities (NAICS 493120) in Texas. Average commercial rate: EIA / state commercial averages (Texas ~8.3¢/kWh; U.S. ~13.5¢/kWh, 2026). Usage uses a ~24.9 kWh/sq ft/yr refrigerated-warehouse benchmark with refrigeration ~70–80% of load; demand charges are ~30–50% of cold-storage bills (industry data). Bills are electricity-only and exclude taxes and fees; demand charges are called out separately.
