Retailers need to pivot to energy diversification amid grid instability

Retail depends on reliability. Customers expect the lights to be on, checkout systems to work and shelves to be well stocked, regardless of what’s happening beyond store doors.

But as extreme weather, aging infrastructure and soaring electricity demand puts increasing pressure on the nation’s power grid, meeting those customer expectations will be more difficult.

Power outages are becoming more frequent, posing severe operational risks. This summer alone, the PJM has issued three hot weather alerts across the county, putting buildings under stress tests of their energy resilience.

For retailers, even a few hours without electricity can mean thousands in losses and a complete halt to the customer journey. Modern retail demands 100% uptime for point-of-sale systems, buy online, pick up in store fulfillment, and climate-controlled inventory, making the power grid the single largest point of failure for an otherwise sophisticated omnichannel operation.

Grid reliability is declining, which means relying on one power source alone is becoming a business hazard.

The U.S. Department of Energy (DOE) projects that an annual loss of load hours could increase by a factor of 100 by 2030 compared with today’s system due to announced power plant retirements and projected load growth. Retailers need to rethink their power operations to ensure their stores will be protected from power outages with a resilient energy strategy.

Retail’s Energy Vulnerabilities

Retail spaces have a growing power problem: a widening gap between perceived preparedness and actual resilience. PERC recently commissioned a nationwide study of more than 2,000 stakeholders across commercial and residential sectors to quantify the impacts caused by the aging, unreliable grid and increasing frequency of outages on U.S. families and businesses.

The data, detailed in “Propane and the Future of Power: Achieving Reliability Beyond the Grid,” revealed that businesses aren’t as energy resilient as they think — and there's an increasing chance to experience the consequences of solely relying on the grid for power.

For example, the research found, 33% of businesses experienced power outages lasting four hours or longer. Despite this, only 72% of businesses have backup power and 13% have an energy strategy to protect their entire operation.

The loss of power simply doesn’t mean the loss of power — it carries a ripple effect for businesses that don’t have a resilient energy strategy. It means a disruption to operations, which leads to a hit on revenue, to cash flow.

While retail spaces hustle to get their power back, operational downtime can reduce customer trust and long-term competitiveness. This doesn’t even account for safety risks, regulatory issues and reputational damage.

The financial losses incurred by one power outage alone can be staggering — up to $78,000 in lost revenue, labor disruptions and equipment damage. For retail spaces particularly, the three biggest financial burdens caused by loss of power are $8,750 from deploying additional personnel, $2,500 in damage to electronic equipment and $2,500 in damage to production equipment.

The weight of power insecurity carries over from finances to emotional impact, with 22% of businesses citing employee safety and well-being as the largest consequence with the greatest emotional toll. Retail operators found wastage of goods (33%), employee safety (20%) and losing customers (20%) as the most affected emotional factors.

These findings underscore the urgency and importance of crafting a diversified energy strategy that doesn’t solely
rely on the grid. While large-scale data centers and additional massive projects strain the grid, retail operations can’t be left in the dust to experience loss of power.

Building an Energy-Diverse Strategy

Energy diversification doesn’t mean replacing the electrical grid, but reducing dependence on it. A diversified strategy provides several key benefits, including:

• Maintains operations during grid outages;
• Protects temperature-sensitive inventory;
• Keeps payment systems and communications online;
• Improves business continuity during extreme conditions;
• Reduces operational risk from rising grid instability; and
• Provides greater control over long-term energy costs.

Every retail facility has different energy needs, so understanding where your building’s current vulnerabilities lie is the first step to rethinking your energy approach.

PERC (Propane Education & Research Council)  recently launched the free Scouting Report assessment tool that allows decision-makers to input details about their operations and receive a personalized “energy resilience score” that not only sheds light on commercial vulnerability, but ways to improve preparedness.

Evaluate your operational risks as well, identifying which systems are most critical to keeping operations running — this could include refrigeration, HVAC, security systems, etc.

Once these priorities are established, retailers can begin implementing solutions that provide greater energy security. On-site generation, including standby generators, CHP systems and microgrids, can keep essential equipment operating during outages to minimize costly downtime.

Diversifying fuel sources is equally important, making hybrid systems a premier choice in energy strategy. Propane is a key component in companion energy systems, a foundation for energy resilience that emphasizes reliability, continuity, preparedness and flexibility.

Those that put propane at the forefront of their energy systems have a few key advantages:

• On-site reliability: Propane offers reliable on-site fuel storage, where natural gas can be disrupted by the same seismic events that affect the electrical grid.
• Portability and flexibility: Organizations rank propane highly for its portability (19%) and reliability (22%), allowing for deployment in diverse environments where major utility lines are unavailable or compromised.
• Sustainability alignment: Propane supports long-term resilience goals as a clean energy that produces fewer emissions than diesel, making it an ideal choice for businesses looking to change their energy strategy to meet sustainability mandates.

Transitioning to a hybrid energy model is more than just a hedge against downtime. It is a tangible step toward meeting sustainability mandates. Propane emits nearly 40% fewer greenhouse gases compared to U.S. grid electricity, providing a dual-benefit: immediate operational reliability and a significant improvement in your store’s environmental, social and governance profile.

Take Control of Your Store’s Energy Reliability

The question for retailers is no longer whether power disruptions will occur, but how prepared they will be when they do.

Retail operators cannot afford to gamble their business on an increasingly strained grid. Energy diversification is no longer a contingency plan, but a business strategy. By investing in resilient, on-site energy solutions today, retailers can protect revenue, maintain customer confidence and ensure their stores remain open when reliable power matters most.

Next Steps

1. Audit: Identify the cost of downtime across your specific store footprint (not just total loss, but loss per store hour) using the Scouting Report assessment tool here.
2. Diversify: Move beyond the grid as a single point of failure by implementing on-site energy solutions (such as
   a propane-powered microgrid).

3. Future-Proof: Leverage hybrid systems that are already compatible with renewable propane as a pathway to long-term decarbonization.