Energy-as-a-Service Market

Energy-as-a-Service Market Outlook (2023 to 2033)

The global energy-as-a-service market stands at US$ 64 billion in 2022, according to a newly published research report by Fact.MR. Worldwide demand for energy-as-a-service is forecasted to accelerate at a CAGR of 9.8% and reach a market value of US$ 179 billion in 2033.

To reduce energy costs and carbon footprints, consumers from the commercial and industrial building sectors are investing at a significant rate in energy efficiency and procuring energy from sustainable sources.

Growing adoption of sustainable energy sources is driven by their ability to reduce carbon emissions, lower energy costs, and maintain ecological balance. Innovative business models, such as on-bill financing, power purchase agreements, energy-efficient performance contracts, and pay-for-performance contracts, offer customers financial aid for energy-efficient building measures and technologies, creating further opportunities for sustainable initiatives.

• Global demand for energy supply services is projected to rise at 8.5% CAGR and reach a market valuation of US$ 55 billion by 2033-end.
• The United States market was valued at US$ 25 billion in 2022.

Energy-as-a-service involves sales of analytics, energy, access to the grid, technology, and personalized services. Challenges associated with carbon emissions are projected to pose severe threats to the global environment, which is predicted to open up opportunities for players.

Increasing adoption of renewable energy sources to meet power demands is expected to drive the need for decentralized energy distribution systems. Rapid industrialization in developing countries has led to higher energy demands and the depletion of fossil fuels. Embracing renewable energy helps reduce carbon footprints resulting from non-renewable energy sources.

Energy generation using renewable energy sources needs high initial investments. Therefore, the majority of projects need support from government agencies. Governments can pay only a portion of the total investment. However, the rest of the amount needs to be invested by the organization and this is predicted to adversely impact expansion opportunities.

A detailed study of multiple aspects of the energy-as-a-service model is included in the market research report published by Fact.MR, a market research and competitive intelligence provider. New product launches, growth opportunities, a regional analysis, key obstacles, and various other related aspects are also included in this research report.

Report Attributes	Details
Energy-as-a-Service Market Size (2022)	US$ 64 Billion
Estimated Market Value (2023)	US$ 70.20 Billion
Forecasted Market Value (2033)	US$ 179 Billion
Global Market Growth Rate (2023 to 2033)	9.8% CAGR
Energy Supply Segment Growth Rate (2023 to 2033)	8.5% CAGR
United States Market Value (2022)	US$ 25 Billion
Germany Market Growth Rate (2023 to 2033)	11.4% CAGR
Key Companies Profiled	Capstone Green Energy Corporation General Electric Company Honeywell International, Inc. Enel SpA Aggreko PLC Ameresco, Inc. Commonwealth Edison Company (ComEd) INPEX Corporation ENGIE SA ENN Energy Holdings Co., Ltd. Alpiq Holding AG Future Energy Solutions Jakson Group Alpiq Holdings AG Budderfly Jakon Group China Yangtze Power

Why is the Need for Energy-as-a-Service Models Increasing Globally?

“Government Energy Targets Driving Adoption of Renewable Sources for Environmental Sustainability”

Governing bodies around the world are focusing on reducing greenhouse gas emissions. The growing energy demand across the globe is also leading to the rising adoption of renewable energy sources due to increasing awareness about environmental sustainability.

Recent introduction of energy targets by many governments around the world to promote the adoption of sustainable energy sources is expected to have a significant impact on the market size.

For instance:

• As per Carbon Brief’s report published in April 2019, the United Kingdom government is aiming to produce half of its entire electricity from renewable sources by the end of 2025.

These factors are projected to contribute to the growing demand for renewable energy sources and thus contribute to market expansion.

“High Demand for Backup Power Systems and Rising Electricity Needs in Transportation”

Residential buildings, commercial establishments, and industries rely on a continuous electricity supply to meet the energy needs of their operations. In situations of power grid failures, the demand for backup power systems, particularly in data centers, increases significantly.

The transportation sector is also undergoing a shift from fossil fuels to electricity. This transition is expected to drive the demand for electricity, especially with the establishment of new charging stations and the rising production rates of electric vehicles. These developments are likely to create opportunities for renewable energy suppliers to meet the growing electricity demand.

Other industries, including textile, manufacturing, pharmaceutical, and chemical, are projected to grow at a significant pace. The continuous growth in manufacturing and operational activities in various end-use industries, including the automotive sector, is expected to drive market expansion.

Construction of mass storage systems and new grids by utilities to use the captured energy from these renewable energy sources is predicted to provide opportunities for service providers.

What Issues are Energy-as-a-Service Providers Facing?

“Heavy Capital Investment for Establishing Multiple Advanced Grids and Their Upgradation”

Producing energy through renewable sources requires significant funding, and currently, solar accounts for 8% of global energy generation, while wind holds a 9% share. Consequently, most projects necessitate support from their respective government entities.

While governments can provide a portion of the investment, the remaining funding is typically borne by the organization itself. The grid upgrading process involves installing numerous smart equipment, both at the utility and customer end, which can be costly and may hinder market expansion.

How are New Companies Projected to Evolve in the Energy-as-a-Service Landscape?

“Focus of Start-ups on Development of Customer-Friendly Energy-as-a-Service Models”

Start-ups are aiming to develop energy-as-a-service models that are helpful in the acceleration of sustainable power. They are also taking certain steps in which customers need not spend the entire amount upfront on infrastructure. In addition, they can also operate the system on their own.

Country-wise Insights

What is Contributing to Increased Demand for Energy-as-a-Service in the United States?

“Inclination towards Efficient Energy Storage Systems Leading to Installation of Energy-as-a-Service Projects”

Demand for energy-as-a-service in the United States reached a market value of US$ 25 billion in 2022.

The United States has implemented energy-as-a-service in several sectors. The commercial sector is one of the prominent end users that is contributing to increased demand for efficient energy storage. These initiatives are also helpful in reducing operating expenses.

Increasing investments in exploration, production, and refining sectors are projected to boost demand for the energy-as-a-service model in the coming decade.

How are the United Kingdom and German Markets Projected to Evolve?

“Supportive Policy Frameworks, Investments, and Grid Infrastructure Expansion”

Germany and the United Kingdom are two prominent markets in the European region that present lucrative opportunities for energy-as-a-service providers. Demand for the energy-as-a-service model in Germany is projected to rise at an exceptionally high CAGR of 11.4% through 2033.

Supportive government and organizational policy frameworks for the deployment of green energy solutions are driving the demand for energy. Installation of various power generation technologies in numerous areas is creating opportunities for players in the industry. Furthermore, increasing investments and plans for the expansion and fortification of grid infrastructure are also propelling growth opportunities.

Why is Asia a Key Market for Energy-as-a-Service?

“Growing Awareness about Clean Energy Sources”

Increasing awareness about clean energy along with government-aided financial support is anticipated to supplement the demand for energy-as-a-service. In addition, manufacturers are investing in maintaining the demand and supply balance. Japan, China, South Korea, and India are key markets for green energy solutions.

Establishment of new facilities for industrial gas and the construction of domestic and commercial spaces are driving the adoption of energy-as-a-service models.

The Japanese market is forecasted to fare at a CAGR of 8.3% from 2023 to 2033.

Category-wise Insights

Why are Energy Supply Services in Such High Demand Worldwide?

“Cost-Effectiveness of Energy Supply Services”

Based on service, the global market is classified into energy supply, operation & maintenance, and energy efficiency & optimization. Demand for energy supply services is predicted to increase at a CAGR of 8.5% and reach a valuation of US$ 55 billion by 2033-end.

Rising population has led to an increasing number of customers globally. Energy optimization solutions enable customers to implement water and energy efficiency projects without upfront capital expenditures. These services are cost-effective in the long run, as customers pay based on their actual energy savings or similar performance metrics.

Which End-use Sector Will Account for High Energy-as-a-Service Demand?

“High Demand for Energy-as-a-Service Models in Industrial and Commercial Sectors Fueled by Focus on Energy Conservation and Analysis Solutions”

The industrial and commercial sectors are generating huge demand for energy-as-a-service models.

Several energy-as-a-service companies are helping conserve electricity and energy across multiple applications. These companies provide software and technical solutions that enable end-use industries to analyze their electricity consumption patterns. Presence of large commercial spaces and increased electricity consumption is creating opportunities for players in this market.

Key Market Players

Prominent companies are increasing their expenditure to strengthen supply chain management systems, maintain product standards, and ensure quality control.

Industry players are entering into partnerships, mergers, acquisitions, etc. to extend their reach.

For instance:

• Infosys and British Petroleum, in October 2021, announced a pilot EaaS solution project that focuses on helping businesses meet their decarbonization goals and improve the effectiveness of energy infrastructures.

Capstone Green Energy Corporation, General Electric Company, Honeywell International, Inc., Enel SpA, Aggreko PLC, Ameresco, Inc., Commonwealth Edison Company (ComEd), INPEX Corporation, ENGIE SA, ENN Energy Holdings Co., Ltd., Alpiq Holding AG, Future Energy Solutions, Jakson Group, Alpiq Holdings AG, Budderfly, Jakon Group, and China Yangtze Power are some of the prominent players in the energy-as-a-service market.

Segmentation of Energy-as-a-Service Industry Research

• By Service :

  • Energy Supply
  • Operation & Maintenance
  • Energy Efficiency & Optimization

• By End Use :

  • Industrial
  • Commercial

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa