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The energy as a service market is expected to grow at a CAGR of around 5.5% during the forecast period. Factors such as tax benefits for energy-efficient projects and rising energy consumption in both the commercial and industrial sectors are driving the market. However, the subscription program for the service typically imposes a higher overall cost than the owner pays for the self-installation system, which is likely to hinder the market growth during the forecast period.

  • With a significant number of commercial spaces available and high consumption of electricity during 2019, it is expected that the commercial segment is likely to dominate the market during the forecast period.
  • Energy as a service concept is still at its nascent stage, especially in developing nations, but in developed nations; the service is on-demand. Various industries, such as metal or fabrication companies, have opted for the service so that it can reduce its operating expenses for energy consumption. Developing nations with high consumption of energy is likely to have ample opportunity for such a market. Countries like India, which have a huge population and have a large number of industries, consuming nearly 42% of the total electricity consumption in 2018, can be an opportunity for such service, where conservation of electricity is on a top priority of the DISCOM companies/government due to its emphasis on reduction of operating expenses.
  • North America is expected to witness significant growth during the forecast period, with the majority of the demand coming from the United States.

Key Market Trends

Commercial Segment to Dominate the Market

  • The commercial segment includes the services that are provided by an Energy as a Service (EaaS) company to conserve energy or electricity on multiple uses. EaaS company offers various technical and software solutions through which the company understands the pattern of electricity consumption.
  • Energy is used across various sectors, but the commercial is one of the significant segments that use a high amount of energy to operate district heating facilities and electrical applicants.
  • Most existing technologies burn fossil fuels and emit carbon dioxide. With electricity consumption increasing in the commercial sector, fossil fuel consumption to generate electricity is also likely to increase. The commercial sector’s adoption of EaaS is expected to reduce electricity consumption from fossil fuels and would thereby help meet emission targets necessary to avoid severe climatic change.
  • Sparkfund, an EaaS company, backed by leading utility company Royal Dutch Shell, is one of the prominent companies that provide bundled energy services, including EaaS, to various commercial spaces in the United States.
  • With a growing population, energy requirement, energy conservation, is essential to maintain its sustainability for a longer duration. Private entities, with government support, are concentrating on the commercial segment to expand its services in the near future.

North America to Witness Significant Growth

  • North America is one of the prominent regions to have implemented EaaS in various sectors. Especially in the commercial industry, the region has adopted various projects that are expected to increase energy efficiency and would help to cut down its operating expenses.
  • The United States has inducted a pay-for-performance approach to achieve energy efficiency. It is estimated that the approach can help to cut down energy consumption by nearly 15%. This approach in the country has created an opportunity for various energy or utility company to extend a service line that can provide services to save electricity.
  • For instance, 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. Thus, such measurement in the region is likely to help the market growth during the forecast period.
  • Subscription of the services in two prominent hotels of Miami, the Aloft Miami Doral, and The Element Miami Doral is an example of the service in the region. It is estimated that the hotels would cut down its energy expenses by near USD 89000 per year.

Competitive Landscape

The energy as a service market is consolidated. Some of the key players in the market include Schneider Electric SE, Engie SA, Honeywell International Inc, Veolia Environnement SA, Electricite de France (EDF) SA, Johnson Controls International PLC, Bernhard, Enel SpA, and Spark Community Investment Co.

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