What is an Energy Budget?

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  • Written By: Kathy Heydasch
  • Edited By: O. Wallace
  • Last Modified Date: 08 September 2019
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An electric bill is often one of the highest overhead expenses to consider when drawing up a budget. Many options exist for reducing or eliminating the need for an energy budget in a home, on a farm or in a business. Solar, wind power, and alternative fuels are just a few of the options that can reduce the need for energy.

No business or residence can survive in today’s world without using energy. In a home, an energy budget must be considered when anticipating household expenses. Extreme months of summer and winter are when the cost of using energy becomes so high. Many utility companies offer options which spread the cost of the spikes in energy use over a 12-month average period, making extreme months of energy use more bearable in terms of expense.

One aspect of an energy budget that is vital to households is the cost of the gasoline for everyday commutes and travel. Transportation companies have also felt the heat from rising energy costs and have had to introduce fuel surcharges. Fuel surcharges are a common item on freight invoices these days because the cost of fuel can shift dramatically in such a short period of time.


On a farm or in a business, an energy budget is vital to the proper management of finances. Heating and cooling costs are only part of the picture. In farming and manufacturing, energy is used to run all sorts of equipment, from tractors and machinery to forklifts and automatic doors. With a good energy budget, some costs can be anticipated, preventing detrimental spikes in energy costs.

While the cost of energy keeps rising, the options for alternative sources of energy are increasing as well. An energy budget nowadays can actually produce positive income if the right investment is made in energy-saving equipment. Private individuals can actually produce power and sell it back to the power companies for a positive cash flow.

The drawback to these ideal positive cash flow options for energy is the cost. Very high capital expenditures are required to purchase the equipment or make the conversions necessary to maintain a positive energy budget cash flow. Some models of energy efficiency require an investment that may not be paid back for months or even years.

In the world of anatomy, an energy budget refers to the balance of energy expenditure versus energy income. Energetics studies energy in the physical world, such as the transfer of energy from one form to another. Energy is measured by calories and joules, and the metabolism of food can be written in an equation known as an energy budget.


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