The Emerging Energy as a Service Market: A Flexible Path to Energy Sustainability

The global transition towards clean energy combined with innovations in technology and business models is driving rapid growth in the Energy as a Service (EaaS) market. EaaS allows customers to implement advanced energy technologies in a streamlined manner without upfront capital costs. Under EaaS, energy providers install, operate, maintain and finance energy assets such as solar, storage, efficiency upgrades, and electric vehicle infrastructure at a customer’s property. The customer pays for the services, savings or energy generated by the systems over time through a service fee model.

The energy as a service market industry is projected to grow from USD 74.03 Billion in 2023 to USD 125.54 billion by 2030

Lowering Costs and Managing Risks A major incentive for EaaS is lowering energy costs and mitigating risks. EaaS providers can leverage expertise in financing, operations and maintenance to deliver energy at lower costs than conventional retail rates in many markets. The predictable payment structure also hedges against utility rate volatility. For asset-intensive solutions like microgrids, EaaS simplifies deployment and transfers performance risks away from the host customer.

Accelerating Clean Energy Usage EaaS enables widespread adoption of solar, storage, electric vehicle infrastructure and other distributed energy resources (DERs) while eliminating upfront capital barriers. Customers can meet renewable energy usage and emissions reductions goals faster using EaaS solutions. It provides a streamlined pathway for companies to purchase clean power without investing heavily in onsite projects.

Monetizing Grid Services The rise of DERs creates opportunities to aggregate and monetize grid services through virtual power plants, demand response and ancillary services markets. EaaS providers can optimize assets to generate revenue streams that offset customer costs. Access to grid service revenues is a key value lever and helps improve project economics.

Enabling Electrification EaaS can facilitate electrification of building end uses such as space/water heating, cooking and EV charging. It reduces risks associated with electrification for building owners and funds the upfront infrastructure costs. Streamlined deployment of ‘behind-the-meter’ assets enables wider adoption of electrification necessary for broader decarbonization goals.

Improving Resiliency Onsite generation and storage solutions provisioned through EaaS increase energy resiliency and prevent business disruptions from grid outages. For facilities like hospitals, microgrids-as-a-service and resilient solar+storage power plants help maintain critical operations during emergencies. EaaS enhances power reliability and energy security.

Who Are the Major EaaS Providers? The EaaS market has several types of energy companies competing to deliver solutions:

• Electric utilities – Many utilities now offer EaaS programs for customers looking to implement DERs. They provide end-to-end project development, financing and operation.
• Distributed energy companies – Startups focused on solar, storage and microgrids are offering EaaS for C&I customers. They provide a modern platform for procuring DERs.
• ESCOs – Energy service companies (ESCOs) traditionally focused on efficiency upgrades are expanding into solar and other DER services through EaaS models.
• Oil & gas majors – Large oil/gas companies are entering the space through acquired/startup subsidiaries to serve corporates with sustainability commitments.
• Automakers – EV manufacturers are introducing EaaS offerings to accelerate EV infrastructure buildout.

Browse In-depth Market Research Report (100 Pages, Charts, Tables, Figures) on Energy as a Service Market

What is Driving Customer Adoption of EaaS? For commercial, industrial and institutional customers, the advantages of EaaS include:

• Cost competitiveness – EaaS projects can lower total energy costs by 10-30% for many large customers
• Mitigating price volatility – Stable EaaS fees provide a hedge compared to utility rate fluctuations
• Accelerated speed-to-market – Quickly implement projects without upfront capital or financing costs
• Enhanced sustainability – Procure clean power and meet ambitious renewable energy or carbon reduction goals
• Improved power reliability – Reduce business disruption from outages by deploying resilient energy systems
• Streamlined operations – Lean on EaaS provider expertise in operating and maintaining onsite energy assets
• EV infrastructure access – Quickly scale EV fleets by installing charging infrastructure through EaaS

The EaaS model will see continued strong growth as it offers a flexible pathway for customers across sectors to transition to cleaner energy. Corporations, utilities, educational institutions, healthcare facilities, government agencies and other entities are turning EaaS solutions to achieve sustainability objectives and reap the benefits of distributed energy adoption. Innovative service models like EaaS are accelerating the global energy transition.