Energy as a Service (EaaS) Market is segmented By Service Type (Power Generation Services, Energy-Efficiency, and Optimization Services, Operational and Maintenance Services), By End-User (Industrial, Commercial), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2023-2030
Energy as a Service (EaaS) Market Overview
Energy as a Service (EaaS) Market is expected to record significant growth by reaching at a CAGR of 13.5% during the forecast period (2023-2030). It included independent contractors, utility service providers and prospective disruptors of established business models using specialized technical, financial or procurement solutions.
Energy as a service (EaaS) is a subscription-based energy service in which the customers pay for an energy service without having to make any upfront capital investment. Energy as a Service encompasses grid access, technology, analytics, energy use and individualized services.
U.S. EIA- Energy Information Administration predicts that between 2018 and 2050, the world's energy consumption will increase by almost 50%. The generation of electricity from renewable energies is rising. The expanding energy efficiency initiatives will boost market expansion.
Energy as a Service (EaaS) Market Summary and Scope
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Metrics |
Details |
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Market CAGR |
13.5% |
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Segments Covered |
By Service Type ,By End-User and By Region |
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Report Insights Covered |
Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights. |
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Fastest Growing Region |
Asia Pacific |
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Largest Market Share |
North America |
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Energy as a Service Market Dynamics and Trends
The market is being propelled by the rising demand for energy as a service to lower energy prices and carbon emissions from buildings. Several variables influence the industry's development, including rising distributed energy resources and falling costs of renewable energy generation and storage options. The market should benefit from the rise in energy usage.
The rise in energy demand from industrial, residential and commercial sectors
Energy as a service is a business model in which customers pay for used energy services without investing huge capital for producing electricity. Demand for energy as services increased in industrial, residential and commercial sectors due to growing population, industrialization & rising urbanization. As per the Department of Economic and Social Affairs of the United Nations, in 2016, World total energy supply (TES) from 1990 to 2016 increased by almost 60%, reaching around 568 EJ. In contrast, world electricity generation reached 25,000 TWh in 2016. Asia-Pacific anticipates growth; among this, China's total energy supply increased by 21% of world TES in 2016.
Further growing urban population and rising industrial development projects with government funding have propelled the demand for energy as a service market. For instance, as per the UN Conference on Trade and Development (UNCTAD) report, the global population reached around 7.5 billion in 2018; among this, around 55.3% had an urban population and in 2018, around 83 million people shifted to urban areas which have increased the demand for the energy as a service market.
Thus the demand for energy as a service has been propelled to avoid the wastage of electricity during the no-load condition to facilitate the required amount of electricity. Several industries adopt this energy as a service in developed countries as it helps to save electricity by 10% to 40%. Further, the energy as a service model works on a subscription basis; customers can pay and purchase only the required amount of electricity. Further rising demand for electricity access in rural and urban areas has propelled the energy as a service market.
Rising demand for distribution systems to augment the market growth
The growing adoption of renewable energy sources such as solar, wind, hydropower etc., with growing government funding and huge investment projects to supply electricity, has propelled the demand for energy as a service market. As per the World Bank, the International Energy Agency and the International Renewable Energy Agency, renewable energy accounted for around 26.2% of global electricity generation in 2018. Renewable use has increased drastically with a growing population and rising industrialization.
Several government organizations have planned to invest in renewable energy sources such as solar, wind and many others. As per the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), between 2018 to 2030, the total annual investment in the energy sector reached approximately US$ 55 billion with expansion and distribution investment of energy access of renewable energy sources reached to around US$700 billion and US$600 billion to improve energy efficiency.
As per the International Energy Agency (IEA) organization in 2018, world electricity generation from coal reached around 10,000 TWh, which increased by +36% as compared to 2017 and natural gas, around 4539 TWh, increased at the fastest growth shown by solar & wind sources 570 TWh, 606 TWh respectively while other nuclear energy sources reached to 2563 TWh in 2018. However, renewable electricity accounted for more than 50% of global electricity capacity additions from 2012 to 2018, reached to 32% of total electricity capacity. Thus, a huge amount of electricity generation through several sources has propelled proper electricity consumption without any wastage have propelled the demand for energy as a service market around the globe.
High costs of EaaS
Energy as a service remains costly as to obtain the subscription model of the electricity supply, several automation modules and advanced technology is required. Energy as a service uses advanced wireless Internet of Things (IoT) sensors for monitoring critical equipment and collecting real-time information at a granular level. The equipment has a high cost per the application requirement and uses advanced analytics platforms for calculating the actual energy consumption. For example, monitoring and analyzing an HVAC pump's electricity demand can be calculated using advanced technological tools to provide detailed insights. It requires advanced technological equipment for greater efficiency and a dollar amount per hour.
COVID-19 Impact on Energy as a Service (EaaS) Market
COVID-19 has caused great problems for the energy industry. Potential new practices and social forms facilitated by the pandemic impact energy demand and consumption. Many measures such as quarantine, social distancing and lockdowns have been set to mitigate the coronavirus infection. The COVID-19 pandemic has profoundly influenced many industries, including agriculture, manufacturing, finance, education, healthcare, sports, tourism and food.
Under lockdown, there was a huge decrease in the demand for electricity, which was somewhat offset by an increase in home use. In most nations, except India, where the recovery was more evident, the electricity demand in June and July rectified itself by 10% and 5%, respectively, underneath the 2019 level of the same month. The decrease in energy demand and consumption brings damage to the energy industry.
For example, the COVID-19 pandemic caused the bankrupts of at least 19 energy companies in U.S. industry. Government interventions have been implemented promptly for energy industry responses. The latest data in July 2020 shows that, compared to the same period in 2019, the peak reduction rates of electricity consumption (weather corrected) in France, Germany, Italy, Spain, UK, China and India during the lockdown period were more than 10%. EaaS initiatives promise long-term cost savings and energy efficiency.
Energy as a Service Market Segmentation Analysis
By service type, the energy as a service market is segmented into energy supply services, operational & maintenance services and energy efficiency & optimization services.
High demand for energy as a service for reducing electricity costs
The energy supply services segment has the highest share, owing to the rising demand for the energy supply for the residential, industrial and commercial sectors for reducing the total overall cost of the electricity bill by implementing a subscription-based model. Energy savings is the key ultimate aim of any business, commercial buildings and residential sector for which they partner with an EaaS provider who provides and deploys advanced technology-based tools and equipment for analyzing the energy profile of the businesses.
Energy as a service provides a detailed analysis of the energy supplied and helps identify the best optimization opportunities. Energy supply services using EaaS also suggest alternative methods of producing, procuring and storing energy and finally help provide a guaranteed reduction in the annual energy costs to the businesses. The use of building Energy as a Service in the Industrial construction sector worldwide has been driven by declining land-to-population ratios and the rising trend of building high-rise Industrial structures and townships. Due to China and India's rising house construction markets, Asia-Pacific experienced the highest growth rate in Industrial development in recent years.
Global Energy as a Service Market Geographical Share
The rise in implementation of energy efficiency in several utilities in North America
North America held a significant share of the global energy as a service market in 2021. Utilities in countries such as U.S., Canada and Mexico are implementing energy efficiency projects and are looking to cut down energy generation costs. New approaches, such as pay-for-performance, are being introduced in U.S. to achieve energy efficiency at a larger scale in the commercial sector.
For example, in California, energy efficiency policies have mandated that at least 60% of the savings achieved in obligation schemes need to be delivered by third-party service providers. Also, a rise in the share of renewable power generation and energy efficiency activities is expected to drive the market in this region.
Energy as a Service Companies and Competitive Landscape
The energy as a service market is extremely competitive with many local and international marketplaces. Product diversity, income growth and opportunities heighten the rivalry in the market. For instance, six months after signing an agreement with ENGIE to incorporate innovative energy efficiency into its manufacturing operations in Ipoh, Malaysia, UAC Berhad, the industry's top producer of fiber cement boards, enhanced its results in energy efficiency for its compressed air system by over 18 percent on electrical costs.
Major global energy as a service market companies includes WGL Energy, Engie, Schneider Electric, Siemens AG, Johnson Controls, General Electric, EDF Renewable Energy, Edison, Alpiq and Enel X.
Engie SA
Overview: Engie SA is a French multinational electric utility company headquartered in La Défense, Courbevoie, France and operates in the fields of energy transition, electricity generation & distribution, natural gas, nuclear, renewable energy and petroleum. The company operates as a public entity and generated sales of US$ 67.23 billion during the fiscal year ending December 31st, 2019. Electric and other energy sales generated the highest market revenue share of 36.8% in 2019. Since January 2019, Engie SA has offered sustainable mobility as a service policy, supporting local authorities and businesses seeking to transform their energy model.
Product Portfolio: ENGIE’s Energy as a Service simplifies energy strategies with guaranteed outcomes. These tailored contracts for energy and energy service reduce risk in operations. ENGIE’s energy as a service helps achieve objectives while removing risk and addressing cash flow priorities in operations.
Key Development: In July 2020, Engie SA signed a partnership with Hannon Armstrong to supply 2.3 GW of energy production through renewable sources in U.S.
The global energy as a service market report would provide access to an approx. 53 market data table, 42 figures and 202 pages.
