Energy as a Service Market

Market Perspective

The global Energy as a Service Market was valued at USD 63.62 billion in 2022 and is projected to reach USD 135.22 billion by 2030, growing at a CAGR of 10.12% from 2023 to 2030.

Energy as a service (EaaS) is a disruptive model in the energy industry that provides bundled energy solutions to customers, including supply, management, efficiency, and often renewables. It's driven by various factors such as sustainability, cost savings, and technological advancements. EaaS offers benefits such as cost reduction and sustainability but faces challenges such as initial costs and data security. Established energy companies, utilities, startups, and tech giants are entering the market. As a result, the future outlook is positive, with expected growth and technology playing a key role in its development.

EaaS solutions are designed to be scalable and customizable, accommodating the diverse needs of businesses across different industries. This scalability allows organizations to adjust their energy strategies as their operations evolve or expand. As businesses grow and change, their energy requirements may increase or decrease. EaaS solutions provide the flexibility to scale up or down accordingly, ensuring that organizations only pay for the energy they actually need. Additionally, the customizable nature of EaaS solutions allows businesses to tailor their energy strategies to align with their specific goals and priorities, whether it's reducing carbon emissions, optimizing energy usage, or improving operational efficiency.

Analyst’s Review on Energy as a Service Market

The increasing focus on renewable as well as non-renewable energy sources, mainly supporting renewable energy for its lower costs, reduced carbon footprint, environmental friendliness, and energy efficiency, is projected to contribute to energy as a service market growth. Furthermore, increasing government initiatives and policies promoting the adoption of renewable energy sources are expected to drive energy as a service market growth. These initiatives include tax incentives, subsidies, and favorable regulations that encourage the use of renewable energy, attracting both residential and commercial consumers. Additionally, advancements in technology and the growing demand for clean energy alternatives are further propelling the market forward. As a result, the renewable energy sector is anticipated to witness significant expansion in the coming years.

Market Definition

Energy as a service (EaaS) is a customer-centric approach in the energy industry that provides customers with comprehensive energy solutions instead of just selling them energy. It includes various aspects such as energy supply, management, financing, monitoring, and sustainability. EaaS aims to simplify energy management, promote efficiency, reduce costs, and accelerate the adoption of clean energy technologies. By offering customers a holistic package of energy services, EaaS enables them to focus on their core business operations while leaving the complexities of energy management to the service provider. This approach not only saves customers valuable time and resources but also allows for more accurate and data-driven decision-making.

Furthermore, EaaS plays a crucial role in driving the transition to a sustainable future by encouraging renewable energy sources and implementing energy-efficient practices. Overall, EaaS empowers customers to embrace a more sustainable and cost-effective approach to energy consumption.

Market Dynamics

With the rise of distributed energy resources and electric vehicles, there is an upsurge in demand for advanced grid management and demand response services. EaaS providers can help businesses manage their energy usage and participate in demand response programs to earn incentives. These providers offer intelligent software solutions and real-time monitoring systems that enable businesses to optimize their energy consumption and reduce costs. Additionally, by integrating renewable energy sources and energy storage, EaaS providers can enhance grid stability and resilience. With their expertise and technology, businesses can actively contribute to a more sustainable and efficient energy grid while reaping the benefits of increased energy savings and flexibility.

The energy sector is subject to a complex regulatory environment with varying policies at regional and national levels. Navigating these regulations and ensuring compliance can be challenging for EaaS providers, especially when operating across different jurisdictions. In addition to the regulatory complexities, EaaS providers also face the challenge of keeping up with evolving policies and changing regulations. These providers need to constantly monitor and adapt their operations to meet the compliance requirements in each jurisdiction they operate in. Furthermore, the lack of harmonization among regulatory frameworks across regions can lead to additional administrative burdens and increased costs for EaaS providers. Overall, staying compliant in the energy sector requires a thorough understanding of the intricate regulatory landscape and a proactive approach to ensure adherence to the ever-changing policy

Segmentation Analysis

The global energy as a service market is segmented based on service type, end-user, and geography.

By service type, it is bifurcated into energy supply services, energy efficiency & optimization services, and operational & maintenance services. The energy supply service segment accounted for a significant revenue share of 41.25% in 2022. This can be attributed to the increasing demand for reliable and sustainable energy sources. Energy supply services offer various benefits, such as uninterrupted power supply, energy efficiency, and cost savings, which are driving its adoption across industries. Additionally, advancements in technology and the integration of renewable energy sources are further fueling the growth of the segment in the energy as a service market.

By end-user it is bifurcated into commercial & industrial. The commercial segment registered a substantial revenue share of 61.25% in 2022. This considerable growth is mainly driven by the increasing adoption of energy management systems and the rising demand for sustainable and efficient energy solutions in commercial buildings. Additionally, government regulations and initiatives promoting energy efficiency and carbon reduction are driving the growth of the commercial segment in the energy as a service market. With businesses recognizing the long-term cost savings and environmental benefits of outsourcing their energy needs, the segment is expected to witness significant growth in the upcoming years.  

Geographical Analysis

Based on region, the global energy as a service market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

North America witnessed significant growth in 2022, accounting for a revenue share of 36.65%. This can be attributed to the increasing adoption of renewable energy sources and government initiatives promoting clean energy solutions. Additionally, the presence of major market players and advanced technological infrastructure in North America is further contributing to its dominance in the global energy as a service market. Moreover, the rising demand for energy-efficient solutions and the need to reduce carbon emissions in the region are expected to drive domestic market growth.

APAC is expected to register the highest CAGR of 13.06% over the forecast period. The regional market is growing substantially due to the increasing population, rapid industrialization, and urbanization. Furthermore, smart city projects are expected to boost the demand for energy as a service solution in APAC. For instance, the Indian government launched the Smart Cities Mission (SCM) in June 2015, identifying 100 cities in order to provide them with core infrastructure, along with a clean and sustainable environment. The government earmarked over $22 billion (nearly €20 billion) for the initiative.

Competitive Landscape

The global energy as a service market report will provide valuable insight, with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers and acquisitions, product innovations, and joint ventures, to expand their product portfolio and increase their market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing extensively in R&D activities, building new manufacturing facilities, and supply chain optimization. The major players in the energy as a service market are:

• Schneider Electric
• Siemens
• Engie
• Honeywell International Inc.
• Veolia
• Johnson Controls
• Bernhard
• General Electric
• Entegrity
• Centrica plc.

Key Developments

• August 2022 (Partnership) - Schneider Electric, a multinational company, inked a strategic partnership with Tietoevry to support its goal of obtaining a world-class searching experience for its websites around the world, including a unified behavior of its subsidiary brands.
• June 2023 (Partnership Programs) - Johnson Controls, the global leader for smart, healthy, and sustainable buildings, announced the participants selected for its 2023 Community College Partnership Program. Launched in 2021 to help enroll and graduate students from historically underrepresented groups, the Johnson Controls Community College Partnership Program planned to, for the third consecutive year, provide $1 million total in funding and Johnson Controls equipment to 10 community colleges in North America.

The global Energy as a Service Market is segmented as:

By Service Type

• Energy Supply Services
• Energy Efficiency & Optimization Services
• Operational & Maintenance Services

By End-User

• Commercial
• Industrial

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America.