Energy as a Service Market Analysis

Energy as a Service Market Overview

The Energy as a Service Market Size was valued at USD 67.8 billion in 2022. The energy as a service market industry is projected to grow from USD 74.03 Billion in 2023 to USD 125.54 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 9.20% during the forecast period (2024 - 2030). Distributed energy sources (DER), increasing use of energy as a service, decarbonization of the global economy, and manufacturers focusing on sustainable energy are the key market drivers enhancing the market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Energy as a Service Market Trends

The growing use of energy as a service (EASS) drives the Market CAGR of energy as a service market. The electrification of vehicles and the introduction of electric vehicles, tremendously transform the transportation sector. Electric vehicles have to be charged regularly for use. It is projected that the rising number of electric vehicles and increased energy use for charging the vehicles will increase demand for the energy as a service market in the forecast period. Moreover, the manufacturers are now focusing on using ecological energy, another factor that will be accountable for the exaggerating of the energy as a service market.

Additionally, the decarbonization is one more driving factor that supports the energy as a service market growth. At the time of energy production fossil fuels, emit a lot of carbon dioxide, which is not beneficial for environment preservation. Many attempts and studies are being conducted to remove fossil fuels and use renewable energy sources.

Moreover, the electric power industry has transformed from the traditional ways, which has led to the increasing use of distributed energy resources, such as combined heat and power, batteries, onsite solar panels, and fuel cells. Improving low-cost technologies, reducing carbon emissions from the power supply, the urge to respond quickly to customer needs and expectations, and reducing cost of distributed energy resources. The reduced costs of energy resources positively impacts the energy as a service ecosystem, and various utility help lower the customer’s energy costs by shifting traditional resources to distributed resources.

For instance: A US-based company, SmartWatt, joined hands with Plumas Lake School to develop a roof-mounted solar PV system at three schools, which provided 100% of the facilities’ total energy consumption and saved USD 180,000 in annual savings. As a result, it is anticipated that throughout the projection period due to the rising distribution energy resources with new but low cost technologies. Thus, driving the energy as a service market revenue.

Recent Development On  Energy as a Service (EaaS) Market

On Apr. 26, 2023, Capstone Green Energy Corporation (CGRN) announced that it has secured an additional energy-as-a-service contract from Lone Star Power Solutions, a large West Texas-based energy company, to provide an additional C800S Signature Series microturbine, following a 3.6 MW Energy-as-a-Service (EaaS) contract earlier this year. EaaS rental offerings are seeing repeat orders from industries like oil and gas and new areas like EV charging providers. Capstone's EaaS meets the customer's need to manage capital investment while delivering reliable, lower-emissions energy.

On Apr. 20, 2023, Aurora Energy Services Limited launched two strategic acquisitions of long-established Scottish businesses. These acquisitions include R&M Engineering, a Huntly-based offshore services & fabrication company, and Inverness Access Training Services (IATS), a rope access & training specialist.

Aurora aims to become a significant international energy services provider in the next five years by continuing to provide services to oil & gas and target the wind, hydrogen, pumped hydro, solar, carbon capture and storage (CCS), and waste-to-energy sectors.

On Feb. 28, 2023, Intertrust, a leading global provider of trusted distributed computing and rights management technology, and EIPGRID, a leading distributed energy resource management, announced a new Energy-as-a-Service (EaaS) system for telecommunications operators to help them lower soaring energy bills, cut carbon emissions, and increase their sustainability footprint.

A secure Virtual Power Plant (VPP) system can deliver sustainable, efficient, green electrons to power-hungry, multi-vendor network equipment. New solutions will mitigate the problem of growing carbon emissions, translating into significant operating expense reduction for operators.

On Dec. 26, 2022, Inox Green Energy Services announced the acquisition of an O&M wind service provider, entering the multi-brand OEM wind turbine O&M business. The wind service provider has a 230-MW-plus fleet that operates majorly in South India. This acquisition is a part of the company's strategic decision to grow its fleet through the inorganic route.

With its first acquisition in an independent O&M service provider, Inox Green has entered the multi-brand OEM wind turbine O&M business. Further, the deal will enable Inox Green to serve customers, leveraging the synergies and efficiencies across the combined teams, supply chain capabilities, and technical expertise.

Energy as a Service Market Segment Insight

Energy as a Component Insights

The energy as a service market segmentation, based on components, includes solutions and services. The service segment dominated the market, with the largest share in the revenue due to the increasing awareness of energy conservation and government initiatives towards the renewable energy usage. Additionally, with the increasing energy consumption, consumer adopt a reliable and robust energy source without any grid and are inexpensive. Moreover, category growth is driven by producing an energy portfolio combing different energy sources to meet consumer requirements.

Energy as a Service End User Insights

The energy as a service end user market segmentation, based on end user, includes residential, government, and industrial. The industrial category generated the most income in the energy as a service market. The industrial category is further divided into small & medium scale enterprises and large scale enterprises. Furthermore, the industrial segment includes manufacturing units and industrial plants, which need a continuous electricity supply and cannot afford electricity interruptions in energy storage and supply. It interrupts their production lines and disrupts business. Therefore, such factors are involved in boost the market growth in the forecast period.

Figure 1: Energy as a Service Market, by End User, 2022 & 2030 (USD billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Energy as a Service Regional Insights

By Region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American energy as a service market area will dominate this market, owing to robust development in the field of artificial intelligence (AI) and data analytics. In addition, the growing demand for energy amid industrial and residential is another factor that will boost the market growth in this region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: GLOBAL ENERGY AS A SERVICE MARKET SHARE BY REGION 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe energy as a service market accounts for the second-largest market share due to the increasing adoption of renewable sources for energy consumption. Further, the German energy as a service market held the largest market share, and the UK energy as a service market was the fastest growing market in the European region.

The Asia-Pacific energy as a service market is expected to grow at the fastest CAGR from 2023 to 2030. This is due to the presence of efficient grid infrastructure. Moreover, China’s energy as a service market held the largest market share, and the Indian energy as a service market was the fastest growing market in the Asia-Pacific region.

For instance, as per the Institute of Energy Efficiency, in 2021, about 115 billion units of smart meters were installed in the United States, an increase of 27.7% compared to 2018. Thus, growing investment in smart meters in the region may drive the market growth toward a decentralized and digitalized grid network, which may support energy growth as a service market.

Energy as a Service Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the energy as a service market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, higher investments, contractual agreements, mergers and acquisitions, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, energy as a service industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the energy as a service industry to benefit clients and increase the market sector. In recent years, the energy as a service industry has offered some of the most significant advantages to medicine. Major players in the energy as a service market, including Johnson Controls (Ireland), Duke Energy (US), Edison International (US), EDF Renewable Energy (UK), Engie (France), Southern Company (US), Schneider Electric Se (France), General Electric (US), Siemens AG (Germany), WGL Energy (US), Orsted (Denmark), ENEL X(Italy), SmartWatt (US),Bernhard Energy (US), Enertika (Sapin), Honeywell (US), Veolia (France), Noresco (US), Wendel Energy Services (US), and others, are attempting to increase market demand by investing in research and development operations.

Schneider Electric SE is a French multinational company specializes in energy management and digital automation. It operates in data centers, infrastructure, buildings, and industries, combining energy technologies, software, services, and real-time automation. Its main purpose is to make the most of the energy and resources, bridging sustainability and progress for all. The company believes that access to digital and energy is a basic human right. As per the Schneider electric, our generation faces a tectonic shift in energy transition and industrial revolution catalyst by a more electric world. The company’s mission is to be a digital partner for sustainability and efficiency. For instance: Schneider Electric announced the launch of GREENext, which will provide energy as a service mainly to commercial and industrial customers with renewables such as battery and solar hybrid micro grid technology, supporting them become more resilient and sustainable.

Key Companies in the Energy as a Service market include

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  Johnson Controls (Ireland)

  
  


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  Duke Energy (US)

  
  


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  EDF Renewable Energy (UK)

  
  


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  Edison International (US)

  
  


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  Engie (France)

  
  


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  Southern Company (US)

  
  


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  Schneider Electric SE (France)

  
  


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  General Electric (US)

  
  


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  Siemens AG (Germany)

  
  


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  WGL Energy (US)

  
  


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  Orsted (Denmark)

  
  


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  Enel X (Italy)

  
  


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  SmartWatt (US)

  
  


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  Bernhard Energy (US)

  
  


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  Enertika (Spain)

  
  


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  Honeywell (US)

  
  


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  Veolia (France)

  
  


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  Noresco (US)

  
  


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  Wendel Energy Services (US)

  
  

Energy as a Service Industry Developments

June 2023 : Clean mobility and renewables are driving early-stage equity funding for energy start-ups.

The World Energy Investment 2023 report serves as a barometer of the world's progress towards clean energy transitions, since financial commitments and expenditure are the final litmus test for whether policies and pledges are followed through on. According to the report, investment in clean energy technologies is outperforming spending on fossil fuels, as affordability and security concerns raised by the global oil crisis boost the case for more sustainable solutions.

According to our forecasts, public spending on energy R&D will increase by 10% in 2022, reaching roughly USD 44 billion, with 80% allocated to renewable energy. Preliminary figures show a comparable increase in R&D spending for listed firms in energy-related sectors in 2022, while early-stage venture capital investment in clean energy start-ups set a new high of USD 6.7 billion. Despite greater capital expenses and widespread economic uncertainties, very strong results were achieved.

May 2022: Opus One Solutions is acquired by GE Digital to power the energy transition. Opus One DERMS is a distributed energy resource management system, is designed to be an end-to-end modular that can support utilities on their distributed energy resources (DERs) journey to keep the grid secure, safe, and resilient while enabling customer participation and energy affordability in power generation contribution.

June 2021: Honeywell launched a battery energy storage system to help users optimize and forecast energy costs. The product portfolio of the company in battery storage and grid stability and energy resource management will expand through this product.

Energy as a Service Market Segmentation

Energy as a Service Based on Component Outlook

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  Solutions

  
  


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  Services

  
  

Energy as a Service Based on End User Outlook

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  Residential

  
  


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  Government

  
  


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  Industrial

  
  

Energy as a Service Regional Outlook