Why commercial and industrial (C&I) customers are a growing sweet spot for energy retailers and service providers

The European energy transition is often framed around households — heat pumps in homes, rooftop solar, electric vehicles (EVs) on driveways. But for energy retailers and service providers, a significant opportunity exists in commercial and industrial (C&I) customers. While these customers occupy a smaller share of the built environment by floor area, they account for a disproportionately large share of energy demand and value creation.

C&I buildings consume far more energy per square metre than homes

Data centres, cold storage facilities, and manufacturing plants operate with massive loads, while hospitals, offices, and retail premises demand constant heating, cooling, and lighting.

Although C&I buildings make up only about 40% of Europe’s total floor space, their energy intensity is 40–50% more per m² than residential buildings. Put differently, each square metre of C&I space represents a larger energy opportunity. And that figure reflects only building services — lighting, heating, cooling, and appliances. On top of that sits the far larger category of industrial process loads from furnaces and motors to industrial boilers, which dwarf building service demand in many sectors.

Europe’s building stock split and typical energy intensities per m2

Bigger contracts, fewer customers

Residential markets are fragmented: millions of households, each a tiny account. By contrast, a single factory can consume as much energy as several thousand homes. That makes the “customer acquisition math” very different.

For energy retailers or solution providers interested in aggregating larger flexible loads, a single B2B (Business to Business) contract can unlock volumes that would require thousands of residential sign-ups. This also supports investment in sales teams, relationship managers, and tailored services. The outcome: lower acquisition costs per unit of energy sold or managed.

Higher margins through services

Selling electrons to households is a low-margin, commodity business. Between 2017 and 2023, the average gross profit margin for ten major incumbents was just 2.5%. This has driven innovation in the residential space, from smarter tariffs to offering technology bundles (solar, EV chargers, heat pumps, and batteries) to monetising flexible assets.

C&I clients, by contrast, have demanded solutions for a longer time and this demand is only expanding: energy efficiency audits, demand-response programs, onsite renewables, EV fleet charging, carbon reporting and battery storage. A C&I account can become a platform for bundled services allowing providers that build these relationships to move beyond commodity sales into multi-year, high-margin partnerships.

Creditworthiness and payment discipline

Large corporates and institutional C&I customers are generally more creditworthy than households. They have stronger balance sheets and better payment discipline, which reduces bad debt risk. For retailers, that translates into more predictable cash flow, particularly important in deregulated or volatile markets. However, SMEs (Small Medium Enterprises) and cyclical sectors, such as hospitality, retail, and construction can be more vulnerable during economic downturns. This makes strategic customer segmentation and risk assessment essential.

Brand and partnership value

Supplying a well-known corporate brings brand credibility. Statements like “We supply Tesco, PepsiCo, Toyota, or IKEA” carry equal weight to listing tens of thousands of anonymous households. B2B accounts can also serve as case studies, references, and signals of capability in sustainability services.

Regulatory and decarbonisation pressures drive demand

Corporates face rising pressure from regulators, investors, and consumers to cut emissions. That creates robust demand for:

• Green corporate power purchase agreements (cPPAs).
• Renewable energy certificates (GoOs).
• Net zero roadmaps and advisory services.

Unlike most households, which may still be resistant to pay a premium for “green” power or energy-efficiency and optimisation, leading corporates now treat these solutions as essential. This willingness to invest drives a lucrative premium market.

Relevant regulations:

• EU Energy Efficiency Directive (EED) – Article 8: large enterprises (>250 employees or turnover >€50m) must conduct energy audits every four years, or to be certified under ISO 50001.
• Energy Performance of Buildings Directive (EPBD): non-residential buildings with a rated output over 290 kW for heating or cooling systems must have building automation and control systems (BACS) by 2025.
• EU Solar Rooftop Initiative (REPowerEU, 2022): From end of 2026, new public and commercial buildings over 250 m² must be designed to include solar PV. By end of 2030, this requirement extends to existing public and commercial buildings over 250 m². Buildings undergoing major renovations must comply earlier.​

Country / regional examples:

France

• New and existing carparks >500 m² must have solar panels or green roofs (phased implementation through 2028).
• New non-residential buildings with >20 parking spaces must have EV charging installed.

United Kingdom

• Building Regulations require EV chargers in new non-residential buildings with >10 parking spaces.

Netherlands

• From 2025, around 30 cities will have Zero Emission Zones (ZEZ).

LCP Delta note: This means that businesses that run last-mile deliveries to city centres will need to electrify their vehicles urgently. The Dutch electricity grid is also heavily congested. The high roll-out of EV chargers will drive businesses to want to mitigate capacity constraints via eg. batteries.

Flanders (Belgium)

• From 2025, solar PV is mandatory for businesses consuming >1GWh of electricity per year with compliance increasing in 2030 and 2035.

LCP Delta note: This has triggered a healthy C&I solar market in Flanders.

The residential C&I balancing act

The residential sector remains important. It is the largest building stock segment, with steady energy retail revenues and growth potential from electrification of heat and transport.

However, the C&I economic opportunity is not to be overlooked. Energy retailers and service providers can succeed by capturing customers who consume more energy, buy more add-on services, and generate higher-value, lower-risk contracts.

Follow the energy intensity and balance sheet, not just the number of customers or square metres.