Energy as a Service Market Size, Share & Trends Report

Energy as a Service Market Size, Share & Trends Analysis Report By Service (Supply, Demand, Energy Optimization), By End-use (Commercial, Industrial), By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: Feb, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-3-68038-854-1
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 95

Report Overview

The global energy as a service market size was worth USD 58.04 billion in 2019 and is anticipated to expand at a CAGR of 14.6% over the forecast period. Increase in Distributed Energy Resources (DER), tax benefits for energy efficiency projects, new revenue generation streams for utilities, and decrease in the cost of renewable power generation and storage solutions are some of the factors driving the growth. The market is driven by the rising potential of renewable energy, price volatility, and rising energy consumption are other significant factors driving growth. Organizations have gradually been looking for sustainable energy sources, which in turn is anticipated to positively influence the growth.

The Energy as a Service (EaaS) concept is still at its nascent stage, especially in developing economies. The market for EaaS is segmented on the basis of service type and end user. The services include management of usage, supply, and assessment. Most energy providers are opting for partnerships and business collaborations in order to attract more consumers. Developed countries, such as the U.S. and Canada have laid down policies and regulatory standards to promote the adoption of EaaS.

U.S. energy as a service market

Increasing focus on renewable as well as non-renewable energy sources that mainly support renewable energy due to lowers costs, reduced carbon footprint, environment-friendly, and energy-efficient is projected to contribute to the market growth. Increasing government investments in sponsoring renewable sources are anticipated to drive the growth of the market over the forecast period.

Energy as a service also provides the customers with the flexibility of choice regarding pricing and ownership. It also helps the operators customize energy generation projects based on different power requirements of the customers in terms of both robust and modern. The service also enables easy and rapid assimilation of energy storage assets with a distributed generation system.

End-user Insights

On the basis of end user, the energy as a service market is segmented into commercial and industrial users. The commercial segment is projected to register the fastest growth during the forecast period. The segment includes establishments, such as educational institutions, healthcare institutes, information centers, airports, and others. In the commercial sector, the buildings are solely responsible for more than 30% of overall consumption. As per the American Council for Energy-Efficient Economy (ACEEE), these institutions/establishments account for over 18% of the energy used by various sectors in the United States. Furthermore, half of the energy used by the commercial sector goes toward lighting and heating.

The growth in the segment can be attributed to various factors including an increase in occupancy, floor area, and admittance to services coupled with a surge in activities, including changes in climate and population. Different types of commercial buildings have exceptional energy needs and the EaaS market helps the commercial owner’s technical expertise and limited capital to instrument efficiency programs. Among several types of commercial building, service, and mercantile buildings consume most of the energy and are thus anticipated to contribute to the market growth.

The industrial segment is anticipated to hold the largest market share during the forecast period with energy service operations being mandated in the commercial segment. This is mainly because of significant structural impacts such as economic growth.

Service Insights

On the basis of service, the market for energy as a service is trifurcated into supply, demand, and optimization services. The demand service segment held the leading market share in 2019 and is anticipated to continue leading the market during the forecast period. With the growing prices, the consumers are looking for to procure robust energy supply in the absence of grid. This factor is anticipated to fuel the growth of the segment in near future.

Global energy as a service market

The energy optimization services segment, on the other hand, is anticipated to register the fastest CAGR over the forecast period. Rising government efforts to encourage renewable energy coupled with the need for cost containment and energy conservation is anticipated to bode well for the growth of the segment in the forthcoming years.

Regional Insights

North America is projected to emerge as the largest regional segment owing to the presence of intelligent building and building automation vendors. Key players are inclined toward reducing costs for delivering services and enhancing the customer experience.

Asia Pacific is expected to lead the market due to the rise in large enterprises. For instance, in 2019, India had more than 300 proposed smart cities projects worth $2 billion. Although energy as a service is still in nascent stage in the region, exhaustion of fossil fuels for electricity generation is anticipated to create growth opportunities for the market in the forthcoming years. Moreover, adoption of green building models and rising government support are some of the factors projected to fuel regional growth.

The European market is likely to witness significant growth over the forecast period, owing to the existence of a huge number of key service providers. Presence of small and large enterprises primarily located in countries such as Belgium, Cyprus, and Greece is anticipated to create growth opportunities in the region.

Energy as a Service Market Share Insights

The market looks promising as the large and small enterprises are looking for easy accessibility of energy sources from trading facilities. Hence, the governing bodies need to take major steps to strengthen the infrastructure for safeguarding quality and safety. The key players are also undertaking contracts for DER and energy efficiency solutions and audits and are thus contributing to the overall growth. However, deployment and integration challenges coupled with the governance of the centralized utility models may hamper the growth.

Nevertheless, the introduction of pay as you go and free for service models is expected to bode well for the key players. The companies are focusing on successful deployment and distribution of energy to commercial and residential sectors. The ability to determine overhead intake helps them manage the energy portfolio to encounter their goals. Shift toward decentralized supplies is anticipated to help new players to enter the market. The providers are focusing on widening their geographical reach. Rising adoption of smart cities, energy storage systems and electric vehicles is expected to positively influence their growth.

The key players include Schneider Electric; Engie; Siemens; Honeywell International Inc.; Veolia; Enel X S.r.l.; and EDF. Schneider Electric is a major player in automation and energy management. The company is inclined toward providing microgrids as services to commercial and governmental institutions. It has signed several agreements to enhance the EaaS business model driving the adoption of microgrids. Engie is another prominent player and is engaged in undertaking several novel and innovative initiatives to cater to the rising demand for sustainable and customized solutions.

Report Scope

Attribute

Details

Base year for estimation

2019

Actual estimates/Historical data

2016 - 2018

Forecast period

2020 - 2027

Market representation

Revenue in USD Billion, & CAGR from 2020 to 2027

Regional scope

North America, Europe, Asia Pacific, Middle East & Africa, Central & South America

Country scope

U.S., Canada, Mexico, U.K., Germany, France, China, India, Japan, South Korea, Brazil, Saudi Arabia

Report coverage

Capacity forecast, company share, competitive landscape, growth factors and trends

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Segments
Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this report, Grand View Research has segmented the global energy as a service market report on the basic service, end user, and region:

  • Service Outlook (Revenue, USD Billion, 2016 - 2027)

    • Supply

    • Demand

    • Energy Optimization

  • End-user Outlook (Revenue, USD Billion, 2016 - 2027)

    • Industrial

    • Commercial

  • Regional Outlook (Revenue, USD Billion, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

      • Mexico

    • Europe

      • France

      • Germany

      • The U.K.

    • Asia Pacific

      • China

      • India

      • Japan

      • South Korea

    • Central & South America

      • Brazil

    • Middle East & Africa

      • Saudi Arabia

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