Save Electricity Costs Before You Even Open Your Restaurant

Save Electricity Costs Before You Even Open Your Restaurant

Published: 18th April 2026

Video

In this video, we answer:

• Why is electricity a major expense for restaurants, especially during inflation?
• When do savings actually start for a profitable restaurant?
• What is a healthy electricity cost-to-sales ratio?
• What percentage is considered dangerous?
• What are the two key areas to cut electricity costs before opening?
• Why choose first-grade energy equipment over third-grade?
• How does proper ventilation reduce electricity costs?
• How much can a small rate difference cost per month?
• Why should you lock your electricity rate in your lease agreement?
• What should you ask the mall before signing a lease?

Key takeaways:

• Electricity is a major expense for most restaurants – especially during inflation.For a profitable restaurant, the savings actually start before you even open your doors.
• The electricity cost-to-sales ratio typically falls between 3% and 6%.Some brands go above 6% – even up to 8%. That is a huge expense that directly determines your profit or loss. So how do you save before opening? Two key areas.
• First, electrical equipment design.For every piece of equipment, do a detailed assessment. Take air conditioners. A first-grade energy consumption unit may cost slightly more than a third-grade unit. But over five years of daily operation, the electricity savings will more than cover the price difference. Always choose commercial-grade, high-efficiency equipment.
• Second, equipment design and ventilation.If you run a hot pot or grilled food restaurant, heat builds up fast. No matter how many air conditioners you install, the heat stays unless you discharge it properly. Place exhaust inlets directly above the hot pots or grills. Remove the heat first – then the cool air can actually cool the room.
• Now, contractually locked-in electricity price.In a shopping mall, you pay the mall’s rate – not the utility company’s direct rate. That markup can be substantial. For a 200-square-meter social dining restaurant using 30,000 kWh per month, the difference between 55 cents and 65 cents per kilowatt-hour is over RM3,000 every single month. That is RM36,000 a year.
• So before you sign your lease, find out the mall’s markup on top of the utility rate.If it is between 10% and 20%, assess whether it is acceptable. Then lock that rate into your lease agreement.
• Electricity savings start before opening day.Get these two areas right, and you have already won half the battle.

Full transcript

[0:00-0:10]
Visual: A restaurant electricity meter spinning rapidly. Then a stack of bills piling up. Text fades in: “Electricity costs are eating your profit.”

Narrator (Male, Deep, Confident, Contractor voice, American Accent):
Electricity is a major expense for most restaurants – especially during inflation. For a profitable restaurant, the savings actually start before you even open your doors.

[0:10-0:25]
Visual: A pie chart showing the electricity cost-to-sales ratio ranging from 3% to 8%. A red warning zone above 6%. Text appears: “3-6% is healthy. Above 6% is dangerous.”

Narrator:
The electricity cost-to-sales ratio typically falls between three and six percent. Some brands go above six percent – even up to eight percent. That is a huge expense that directly determines your profit or loss. So how do you save before opening? Two key areas.

[0:25-0:45]
Visual: Split screen showing a 1st Grade energy label vs a 3rd Grade label. Then an air conditioner with a coin stack beside it. Text appears: “Higher grade equipment costs slightly more upfront. But it pays for itself.”

Narrator:
First, electrical equipment design. For every piece of equipment, do a detailed assessment. Take air conditioners. A first-grade energy consumption unit may cost slightly more than a third-grade unit. But over five years of daily operation, the electricity savings will more than cover the price difference. Always choose commercial-grade, high-efficiency equipment.

[0:45-1:05]
Visual: A hot pot restaurant with steam and heat rising. The heat stays in the room. Then a ventilation diagram showing exhaust inlets placed directly above the grills, pulling heat out. Text appears: “Remove the heat first. Then cool the room.”

Narrator:
Second, equipment design and ventilation. If you run a hot pot or grilled food restaurant, heat builds up fast. No matter how many air conditioners you install, the heat stays unless you discharge it properly. Place exhaust inlets directly above the hot pots or grills. Remove the heat first – then the cool air can actually cool the room.

[1:05-1:25]
Visual: A shopping mall facade. A lease agreement with a highlighted section: “Electricity Rate – Locked.” A calculator showing: 30,000 kWh x 3,000/month. Text appears: “Lock your rate. Save thousands.”

Narrator:
Now, contractually locked-in electricity price. In a shopping mall, you pay the mall’s rate – not the utility company’s direct rate. That markup can be substantial. For a 200-square-meter social dining restaurant using 30,000 kWh per month, the difference between 55 cents and 65 cents per kilowatt-hour is over 36,000 a year.

[1:25-1:35]
Visual: A pen signing a lease agreement. The electricity clause circled. Text appears: “Ask the markup. Lock the rate. Save before you open.”

Narrator:
So before you sign your lease, find out the mall’s markup on top of the utility rate. If it is between ten and twenty percent, assess whether it is acceptable. Then lock that rate into your lease agreement.

[1:35-1:40]
Visual: Final text on screen: “Electricity savings start before opening day.”

Narrator:
Electricity savings start before opening day. Get these two areas right, and you have already won half the battle.

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