Businesses may have to conduct mandatory energy audits every three years under proposed bill

Kathmandu, October 9

The government has proposed making energy audits mandatory for businesses and commercial sectors that consume energy above a threshold set by the government.

Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha has registered the Renewable Energy and Energy Efficiency Bill, 2026, in the House of Representatives, proposing new requirements for energy conservation and efficient energy use.

Sections 6 and 7 of the bill require businesses and sectors listed in its schedule that meet the prescribed energy-consumption threshold to maintain energy-use records, set energy-saving targets and undergo regular energy audits.

Under the proposed provisions, businesses would have to prepare and implement annual energy-efficiency plans, maintain monthly records of energy consumption, use energy-efficient technologies and equipment, and develop plans to replace equipment that consumes excessive energy.

They would also be required to conduct energy audits of the technologies, equipment and systems used for energy production, supply or consumption, and implement recommendations made in the audit reports.

The bill proposes that businesses conduct their first energy audit within three years of starting operations and subsequent audits every three years. Businesses already operating when the law comes into force would have to complete their first audit within three years of its commencement.

Businesses would also be required to appoint an energy manager to oversee compliance with the proposed obligations.

Under Section 7, energy audits would have to be conducted by qualified energy auditors. Their reports would need to cover energy audit policies and standards, energy-use data, technologies and equipment used in energy production and distribution, the state of energy consumption, and measures adopted to save energy.

The auditors would be required to provide a copy of the report to the concerned business or sector and the designated central authority.

The proposed provision would introduce a mandatory energy-audit requirement that is not currently in place. The requirements would take effect only if the bill is passed and becomes law.

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