Energy as a Service Industry Expected to Boom in the Coming Decade, Says Guidehouse

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Business consulting firm Guidehouse recently published a report on the energy-as-a-service market, predicting that it will grow by 32.1% per year between 2021 and 2030. The estimated value of the 2021 as-a-service market is $5.4 billion. Guidehouse projects this number to rise to $66 billion by 2030.

Even in 2019 and 2020, the as-a-service market grew despite the coronavirus pandemic. Key drivers of EaaS’s increased adoption include:

• Energy savings.
• Sustainability and decarbonization goals.
• Energy reliability and resiliency needs.
• Deferred maintenance backlogs.
• Capital constraints and layoffs from the pandemic.

However, for the market to realize these gains, Guidehouse found that it must overcome a number of barriers, such as:

• Low customer awareness.
• Lack of standardization.
• High transaction costs.
• Reluctance to give up control of energy assets.

Energy as a service is a subscription-based power delivery model in which clients receive energy services from an energy service company (ESCO) in exchange for a recurring fee. Clients benefit from avoiding direct electricity payments and spending money on equipment, software, and device management. Services include supplying clients with electricity as well as offering energy advice, asset installation, financing and energy management solutions.

EaaS was initially devised as a way to incentivize energy efficiency. Conventional utilities profit from electricity sales, discouraging them from promoting energy efficiency. Through contracts that reward energy efficiency, ESCOs are able to profit from helping clients reduce energy consumption, saving them money and reducing greenhouse gas emissions.