Market Definition
Energy as a Service (EaaS) is a business model that enables consumers to use various energy services without investing in capital-intensive equipment. The electrical appliances & services that are provided to the customers are owned & operated by a service company or energy management firm. The EaaS companies provide consumers with numerous energy services such as energy supply services, operational & maintenance services, and energy efficiency & optimization services in the form of a subscription.
Market Insights & Analysis: Global Energy as a Service Market (2023-28):
The Global Energy as a Service Market size was valued at around USD 70 billion in 2022 & is projected to grow at a CAGR of about 10.3% during the forecast period, i.e., 2023-28. The market growth is driven by various factors, such as the rise in the deployment of Distributed Energy Resources (DER) as well as the tax benefits that are provided by governments of the countries to deploy renewable sources of energy in new construction projects. For instance:
These initiatives are designed to achieve the decarbonization targets set by various governments of countries across the globe. Most energy providers are opting for partnerships & business collaborations to attract more consumers. Developed countries, such as the US & Canada, have laid down policies & regulatory standards like the Canada Energy Policy & Solar Interconnection Standards & Policies in the US to promote the adoption of EaaS. The technological advancements in the industry, including the emergence of advanced energy management software & associated systems, have also proven to be a major factor in the revenue growth of the market.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2018-21 |
| Base Year: 2022 | |
| Forecast Period: 2023-28 | |
| CAGR (2023-2028) | 10.3% |
| Regions Covered | North America: US, Canada, Mexico |
| Europe: Germany, The UK, France, Spain, Italy, Rest of Europe | |
| Asia-Pacific: China, India, Japan, South Korea, Australia, Rest of Asia-Pacific | |
| South America: Brazil, Argentina, Rest of South America | |
| Middle East & Africa: UAE, Saudi Arabia, South Africa, Rest of MEA | |
| Key Companies Profiled | Engie, Enel X, Schneider Electric, Ameresco, Siemens, General Electric, Honeywell, Johnson Controls, EDF Renewable Energy, Edison, Alpiq, Veolia, Orsted, Centrica, WGL Energy, Others |
| Market Value (2022) | USD 70 Billion |
These energy management systems are particularly relevant in the commercial & industrial sectors due to their huge energy consumption & the implementation of these systems would result in reduced energy costs for these sectors. The growing demand for customized energy solutions is another factor propelling market growth as EAAS providers allow their consumers to alter their energy usage according to their preferences, leading to higher consumer satisfaction as this model allows the consumers to avail more flexible & scalable energy services.
Furthermore, the revenue growth of the Energy as a Service Market is fueled by the growing urbanization and surging construction of residential & non-residential buildings around the globe. The construction of smart city projects announced by different countries like Saudi Arabia, The UAE, India, China, etc., would also lead to the expansion of the industry as these projects focus on energy utilization by using advanced technologies such as IoT and Big Data Analytics, further enhancing the Global Energy as a Service Market size.
Global Energy as a Service Market Driver:
Increasing Demand for Distributed Energy Resources – The shift of the power sector from traditional ways to modern approach has led to increased use of Distributed Energy Resources (DERs), such as on-site solar panels, fuel cells, and combined heat & and power. According to the International Energy Agency, renewable energy resources are expected to account for approximately 95% of the global power capacity by 2026 to decrease the dependency on fossil fuels & reduce carbon emissions.
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The growing focus of the governments to reduce carbon emissions, advancement in technologies, urge to improve consumer satisfaction, and declining costs of distributed energy resources are driving the Energy–as-a-Service Market. Thus, various energy services providing companies like Honeywell, etc., have been developing EaaS solutions to offer their customers distributed energy resource benefits & promote energy savings.
Moreover, according to the Electric Reliability Council of Texas (ERCOT), the large-scale adoption of DERs can reduce the peak load of the power grid by approximately 9 to 15% in Texas. The reduced load can result in an estimated savings of nearly USD 5 billion in Texas. Hence, the implementation of DERs throughout the US would result in an estimated savings of approximately USD 50 billion annually by 2029. Thus, the adoption of DER solutions by consumers across the global countries would considerably drive the market in the forecast period.
Global Energy as a Service Market Opportunity:
Increasing Retrofitting Projects to Boost the Requirement for Energy-as-a-Service – Many countries worldwide, such as the US, the UK, India, etc., are actively promoting & implementing plans to retrofit buildings for various reasons, including energy efficiency, environmental sustainability, and reducing carbon emissions. Retrofitting involves the replacement of older energy appliances & solutions with newer, more energy-efficient models. Therefore, upgrading or modifying existing systems to improve their performance, efficiency, and functionality to minimize electricity consumption & comply with environmental regulations would provide an opportunity for the requirement for Energy as a Service. For instance:
Moreover, environmental regulations & sustainability initiatives implemented by the government of countries like Saudi Arabia, the UAE, etc., to reduce energy consumption & carbon emissions & promote renewable energy would also surge the demand for EaaS in retrofitting projects.
Global Energy as a Service Market Challenge:
Integration & Deployment Challenges to Hinder the Growth – The deployment of renewable energy sources includes various technical & feasibility considerations which have emerged as restraining factors for the market growth. Some capacity constraints, such as limitations on manufacturing capacity, restricted & limited supplies of basic raw materials, and limited skilled workforce, have been depriving the market growth. Despite having strong operational capabilities, major players in the market have been facing challenges in the execution of energy-as-a-service projects.
Moreover, several advanced & emerging technologies, such as monitoring platforms & connected devices need constant communication to achieve the target of energy cost savings. Furthermore, land acquisition & environmental clearances have also posed a threat to the execution of certain large-scale projects globally, further limiting the growth of the Global Energy as a Service Market.
Global Energy as a Service Market Trend:
Increasing Adoption of Microgrids & Smart Grids – To increase energy efficiency & resilience, EaaS providers are progressively using microgrids & smart grids, especially in rural or off-grid places. Microgrids are localized power systems that have their own production & storage capacities & are being used to increase energy dependability. Smart grids use cutting-edge technology like IoT sensors & data analytics to efficiently monitor, regulate, and optimize energy usage.
Moreover, investments in digital infrastructure, such as the development of advanced sensors, including phasor measurement units as well as the development of Flexible Alternating-Current Transmission Systems (FACTS) are expected to enhance the Global Energy as a Service Market in the coming years.
Global Energy as a Service Market (2023-28): Segmentation Analysis
The Global Energy as a Service (EaaS) Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the national levels. Based on the analysis, the market has been further classified as:
Based on Type:
The Operational & Maintenance Services holds the prominent market share & is expected to grow at a considerable rate during the forecast period as well. This is owing to the rising government initiatives to promote renewable energy, together with the requirement for cost control & energy conservation. Moreover, consumers are searching for a reliable energy source without a grid due to rising energy prices. This element is projected to accelerate the segment's growth shortly.
Demand response management is an essential component of operational & maintenance services, which schedules the operation of appliances to save energy expenditures by considering both, client convenience & electric equipment. Further, by transferring some demand from peak to off-peak demand periods, the approach also improves the stability of electrical networks and lowers consumers' power costs. As a result, industrial facilities are increasingly utilizing operational & maintenance services, further leading to the enhancement of the Global Energy as a Service Market size.
Based on End User:
The Commercial segment grabbed the highest market share in 2022 and is projected to register the fastest growth during the forecast period. The segment includes establishments of corporate offices, retail stores, malls, hotels, etc. Regions such as Asia-Pacific, the Middle East, and North America have witnessed a rapid expansion of commercial spaces with the growth of infrastructure & urban spaces to cater to the fast-growing population & urbanization. As per the World Bank, the total urban population across the globe has risen from nearly 4.21 billion to approximately 4.53 billion between 2018 to 2022.
Furthermore, the development of new smart cities across developing regions such as India, Egypt, Saudi Arabia, China, etc., has also instigated the demand for systematic development of new commercial & residential spaces to accommodate the growing urban population & tourists. Also, Information Communication Technology and various other service-based industries have gained significance in the historical years, which have led to the construction of numerous commercial buildings.
The economic growth & business expansion by various global companies in pre-eminent countries has resulted in the inception of high-rise commercial buildings to cater to the office space requirement of enterprises & organizations. Hence, the new development of commercial buildings would further require the EaaS as a sustainable approach leading to the expansion of the Global Energy as a Service Market in the years ahead.
Global Energy as a Service Market Regional Projection:
Geographically, the Global Energy as a Service Market expands across:
North America is expected to hold a considerable market share in the Global Energy as a Service (EaaS) Market due to the widespread use of EaaS solutions in several commercial & industrial sectors. The region has embraced several initiatives designed to improve energy efficiency & save operating costs. For Instance:
The Government of the US launched the Grid Resilience and Innovation Partnerships (GRIP) Program in 2022 to upgrade the grid infrastructure of the country to modern levels. Under the program, the government would provide approximately USD2.5 billion to various stakeholders in the grid infrastructure industry, such as electric grid operators & electricity storage operators over five years (2022-2026).
Furthermore, energy service providers in the US & Canada are investing in smart grid & smart metering systems, as they use advanced data analytics, which enables consumers to optimize energy consumption.
Global Energy as a Service Industry Recent Development
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Frequently Asked Questions
A. The Energy as a Service Market is projected to grow at a CAGR of around 10.3% during 2023-28.
A. Increasing demand for distributed energy resources is expected to drive the Energy as a Service Market during 2023-28.
A. Engie, Enel X, Schneider Electric, Ameresco, Siemens, General Electric, Honeywell, Johnson Controls, EDF Renewable Energy, Edison, Alpiq, Veolia, Orsted, Centrica, WGL Energy, and Others are the top players in Energy as a Service Market.
A. The operational & maintenance services segment is the leading component in the Energy as a Service Market.
A. North America region would present growth prospects in the Energy as a Service Market during 2023-28.
A. The increasing adoption of microgrids & smart grids is the key trend shaping the growth of the Energy as a Service Market.
A. The booming retrofitting projects is expected to be a potential opportunity in the Energy as a Service Market through 2028.
A. The integration & deployment challenges for various technologies & equipment are affecting the growth of the Energy as a Service Market.
A. The residential, commercial, industrial, and public infrastructure are the potential end-users of the Energy as a Service Market.
Global Energy as a Service Market Research Report (2023-2028) - Table of Contents
