Global Energy as a Service (EaaS) Market to Reach $72.62 Billion by 2023, Fueled by Increasing Renewable Energy Adoption

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Oct 09, 2023, 18:15 ET

DUBLIN, Oct. 9, 2023 /PRNewswire/ -- The "Global Energy as a Service (EaaS) Market (by Service Type, End-User, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2026)" report has been added to ResearchAndMarkets.com's offering.

The global energy as a service (EaaS) market is poised for remarkable growth, with a projected valuation of US$72.62 billion by 2023, representing a robust compound annual growth rate (CAGR) of 8.95% during the forecast period.

Energy as a service (EaaS) is a transformative solution that promotes the adoption of advanced, low-carbon technologies. Under this business model, customers can access energy services without the need for substantial upfront capital investment. EaaS providers are responsible for managing and monitoring energy supply, reducing operational expenses, and enhancing profitability for their clients.

Unlike conventional energy supply models, EaaS offers a wide range of energy-related services to consumers. This innovative approach eliminates the need for direct electricity payments, costly updates to electrical equipment or software, and device administration, while still providing the benefits of energy-efficient technology. Worldwide, governments are implementing substantial initiatives and regulations to raise awareness about the advantages of renewable energy, resulting in increased demand and growth in the global energy as a service industry.

Segmentation Highlights

By Service Type: The global energy as a service market is segmented into three key service types: Energy Supply Services, Operational and Maintenance Services, and Energy Efficiency & Optimization Services. The Energy Supply Services segment holds the largest share in the global market due to the rapid proliferation of distributed energy generation sources like solar, wind, fuel cells, and heat and power. This growth has driven the demand for energy supply services.

By End User: The market is further segmented by end-user, with Commercial and Industrial sectors being the primary categories. The Commercial sector is anticipated to experience the highest CAGR, driven by the increasing demand for energy consumption optimization to reduce energy costs and support sustainable environmental practices.

Geographic Overview

The global energy as a service market is divided into five major regions: Asia Pacific, North America, Europe, Latin America, and the Middle East & Africa. Key countries within these regions include China, India, Japan, South Korea, Australia, the US, Canada, Mexico, Germany, France, the UK, Italy, Spain, Brazil, Argentina, and more.

Asia Pacific leads the market, holding the largest share, with projections of the highest CAGR during the forecast period. The region is witnessing increased investments in smart energy infrastructure, renewable energy sources, and urbanization, driving market growth. In North America, the US dominates the energy as a service market, with notable growth in Energy Efficiency & Optimization Services due to the deployment of smart grids and meters.

Key Drivers and Challenges

Growth Drivers:

Increasing Renewable Energy Generation
Proliferation of Electric Vehicles
Growing Investment in Clean Energy and Energy Efficiency
Rapid Growth in Distributed Energy Resources

Challenges:

High Integration and Deployment Costs
Cybersecurity Vulnerabilities

Trends

Internet of Energy
Increasing Use of Smart Grids
Advanced Engineering in Renewables
Growing Adoption of Blockchain

Driver: Increasing Renewable Energy Generation

The emphasis on renewable and non-green energy sources for eco-friendly energy management, thermal conservation, and reducing CO2 emissions is growing. Renewable energy is considered a vital means of safeguarding the environment due to its low to zero harmful pollutant emissions. Corporations are increasingly seeking sustainable or renewable energy sources. Furthermore, public investment in renewable energy is on the rise. These factors have led to an increase in renewable energy generation, positively impacting the adoption of the EaaS model and driving the global energy as a service market's growth.

Challenge: High Integration and Deployment Costs

The implementation of an EaaS solution involves deploying advanced Internet of Things (IoT) devices and equipment to monitor energy consumption and usage patterns. Service providers use this data to set energy tariffs and recommend energy management techniques. The installation of these devices can be complex, especially in large existing commercial or industrial environments. An initial challenge in implementing the EaaS model is installing renewable energy systems and battery storage systems at end-user facilities. While these systems lead to long-term savings, their initial deployment costs can be significant, potentially discouraging customers from opting for an EaaS solution. This challenge may impede market growth during the forecast period.

Trend: Increasing Use of Smart Grids

Smart grids are characterized by automation, communication, and IT systems that monitor power flows from generation points to consumption points, even down to individual appliances. They enable real-time or near-real-time control of power flow and load curtailment to match generation. Smart grids also facilitate the participation of energy consumers, allowing them to both utilize and generate electricity. Smart grids play a critical role in integrating and increasing the penetration of renewable energy sources, making them essential for supporting the development and widespread adoption of plug-in hybrid electric vehicles (PHEVs) and grid-connected storage. Consequently, the installation of smart grids is expected to increase in the coming years, further boosting the growth of the EaaS market.

The COVID-19 Analysis

The COVID-19 pandemic had an adverse impact on the energy as a service market. Industries relying on renewable energy sources experienced partial shutdowns or reduced operations due to rising cases, affecting renewable energy demand and the overall EaaS market. In the post-COVID era, the EaaS model is expected to gain significance in the smart energy ecosystem, helping reduce energy costs. Initial energy investments witnessed significant reductions during the pandemic, with companies struggling to manage fixed costs and survive the pandemic's impact. Large capital investments in energy infrastructure were postponed, canceled, or delayed. Consequently, the EaaS market faced significant challenges in 2020. However, annual global energy investment is projected to rebound in 2021, nearing pre-crisis levels and emphasizing the importance of the EaaS model in energy cost management.

Analysis of Key Players

The global energy as a service market exhibits a fragmented landscape. Key players in the market include Honeywell International Inc., ENGIE, Enel S.p.A (Enel X), Johnson Controls International PLC, Veolia Environment S.A., Centrica plc, Siemens AG, General Electric Company (GE), Electricite de France S.A. (EDF Renewables), ABB Group, Schneider Electric SE, Edison International (Edison Energy, LLC), and AltaGas Ltd. (WGL Energy).

For more information about this report visit https://www.researchandmarkets.com/r/eohatg

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