; Energy as a Service Market Size, Share, Trend 2034

Energy as a Service Market

Energy as a Service Market Size, Share, and Analysis, By Service (Energy Supply Services, Operational & Maintenance Services, Energy Efficiency, and Optimization Services), By End User (Commercial and Industrial), By Region (North America, Europe, Asia-Pacific, and Rest of the World), And Regional Forecast 2024-2034

Published on: May-2024
Report Code: FG EP 01972
No. of Pages: 170-350
Report Format: PDF

Energy as a Service Market is anticipated to grow at a CAGR of 9.8% in the forecast period (2024-2034), with the market size valued at USD 72.6 billion in 2023 and projected to reach USD 203.9 billion by 2034.

Product Overview

Energy as a Service is an advanced business concept in which energy providers offer personalized energy solutions to users, that are focused on efficiency and affordability. EaaS consists of various energy management services, such as system optimization, maintenance, and installation, as opposed to traditional energy supply models. This method transfers the responsibility for managing energy infrastructure from the user to the service provider, thereby allowing businesses to focus on their core activities while simultaneously achieving sustainability goals. Energy as a Service commonly integrates advanced technologies such as IoT, AI, and renewable energy sources to deliver personalized solutions that align with each unique requirements of customers. Therefore, by offering adaptability and transparent cost structures, Energy as a Service assists in the reduction of carbon footprints and encourages innovation in the evolving energy sector.

Market Highlights

Energy as a Service Market is expected to demonstrate a CAGR of 9.8% during the forecast period, 2024-2034

Energy as a Service Market is projected to reach USD 203.9 billion, growing at a CAGR of 9.8% during the forecast period, due to the growing demand for energy-efficient and sustainable solutions. Several businesses are embracing EaaS models to transfer their energy management responsibilities, which allows them to concentrate on core operations while simultaneously reducing costs and negative impacts on the environment. In addition, innovations such as IoT, AI, and renewable energy integration are providing effective energy monitoring regularly. Thus, with applications covering commercial buildings, manufacturing, healthcare, and transportation, the EaaS market provides specific energy solutions that meet the unique requirements of various industries. Consequently, the EaaS industry will expand and provide promising opportunities for established companies and emerging players in the energy sector.

Source: Fatpos Global

Energy as a Service Market Segmentation

Energy Efficiency and Optimization segment will promote market growth due to rising awareness of energy efficiency

Energy as a Service Market is segmented based on Service into Energy Supply Services, Operational & Maintenance Services, and Energy Efficiency & Optimization Services. The energy efficiency & optimization segment is expected to lead the Energy as a Service (EaaS) market due to growing awareness of climate change and sustainability, which encourages businesses to reduce their environmental impact. Additionally, given that energy costs are major operational expenses, organizations are looking to improve their energy usage to save costs and maximize their profitability. Therefore, the energy efficiency & optimization segment occupies a prominent position within the Energy as a Service market by offering attractive solutions that address environmental concerns and the economic needs of users. 

Commercial segment will lead the market due to the high power demand in commercial spaces

Energy as a Service Market is segmented based on End User into Commercial and Industrial. The commercial segment will likely lead the Energy as a Service (EaaS) market as commercial establishments like office complexes, retail spaces, and hospitality venues have high energy consumption levels and environmental footprints, which makes them primary targets for energy efficiency and sustainability needs. Moreover, commercial enterprises are prioritizing cost reduction and focusing on their corporate social responsibility credentials, which promotes the adoption of EaaS solutions to meet these objectives. Furthermore, regulatory standards and incentives related to energy efficiency and reducing carbon emissions serve as key catalysts to encourage commercial entities to invest in energy-as-a-service solutions.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Improvements in Technology have Boosted the Growth of the Industry

Constant progress in technologies like the Internet of Things (IoT), Artificial Intelligence (AI), and the integration of renewable energy are essential growth drivers for the Energy as a Service market. IoT allows interconnected devices to collect and transmit real-time data, which improves monitoring and optimization of energy. AI algorithms analyze large datasets and identify patterns to improve the consumption of energy. Furthermore, combining renewable energy sources such as solar and wind power into EaaS solutions helps in reducing the dependency on fossil fuels, along with cutting down carbon emissions. These technological strides improve the performance and reliability of EaaS offerings and make them more attractive to businesses that are seeking new solutions for their energy management needs.

Regulatory Support and Incentives have been Beneficial for Market Growth

Government policies and regulations play an important role in boosting the adoption of Energy as a Service solution by providing several incentives to promote sustainability. Governments across the world are framing regulations to limit carbon emissions, lower energy consumption, and stimulate the adoption of renewable energy sources. Additionally, various financial incentives like tax credits, rebates, grants, and subsidies are offered to businesses that are investing in energy-efficient technologies and renewable energy projects. These incentives help reduce the initial capital outlay required for implementing EaaS solutions, which makes them accessible and appealing to businesses.

Restraints

Initial Capital Investment is Reducing Market Growth Potential

Energy as a Service (EaaS) market is facing several challenges due to the initial capital investment required for implementing energy-efficient technologies and infrastructure. EaaS models promise long-term cost savings and operational benefits, due to which the upfront costs associated with equipment installation and system integration can discourage businesses from adopting these solutions. This financial barrier can affect smaller businesses or those with limited budgets, thereby slowing down market growth in certain sectors or regions. Consequently, to address this limitation, new financing options such as leasing arrangements or government incentives could be explored. These measures would help reduce the financial burden and encourage the adoption of EaaS solutions during the forecasted period.

Recent Developments

  • In 2023, Schneider Electric introduced the EcoStruxure Microgrid Advisor, which is the better digital solution helping businesses and organizations to optimize energy and integrate various renewable energy sources into their microgrids. After the acquisition of IES Consulting Group, the company has strengthened its analytics and optimization capabilities.
  •  In 2023, Engie partnered with Microsoft collaborated with Microsoft to develop and deliver digital solutions for building energy management and optimization using the Microsoft Azure cloud platform. The company also successfully acquired EvBox, by expanding Engie's electric vehicle charging infrastructure and services offerings.
  • In 2023, Siemens launched Desigo CC cloud, which is a cloud-based building management system offering improved remote monitoring and control capabilities for energy efficiency. The company has also signed a partnership with Ørsted, focusing on co-developing and deploying offshore wind farms and related services.
  • In 2023, Honeywell International Inc. launched Forge Energy Orchestrator, which is software that helps manage energy use across entire building portfolios, optimize energy efficiency, and reduce costs. They have also acquired Sparta Group thus strengthening Honeywell's position in the building automation and controls market.
  • In 2023, General Electric introduced the Grid IQ Microgrid Controller, which is a solution helping in managing and optimizing energy use in microgrids with a focus on integrating renewable energy sources. Johnson Controls launched the OpenBlue Enterprise Suite, which is a suite of digital solutions that provides comprehensive building management.

Energy as a Service Market

Key Players:

  • Schneider Electric
  • Engie
  • Siemens AG
  • Honeywell International Inc.
  • General Electric
  • Johnson Controls
  • Veolia
  • Duke Energy
  • Ameresco
  • Noresco
  • Trane Technologies
  • Centrica
  • Edison Energy
  • Enel X
  • NRG Energy
  • Other Prominent Players (Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis)

Regional Analysis

Energy as a Service Market is segmented based on regional analysis into five major regions: North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. The North American region is dominating the Energy as a Service market as the region has a mature and well-established energy infrastructure, that provides a strong foundation for the adoption of modern energy management solutions like EaaS. Additionally, North America's culture of sustainability and environmental awareness is attracting businesses to invest in energy-efficient technologies to reduce carbon emissions. Moreover, the presence of major market players and technological innovators in North America further strengthens its dominating position. These companies introduce advanced solutions and drive the growth of energy as a service market through research and development efforts.

Source: Fatpos Global

Impact of COVID-19 on Energy as a Service Market

COVID-19 pandemic has significantly impacted the Energy as a Service (EaaS) market. Initially, the market faced several disruptions due to lockdown measures and disturbance in the supply chain. Several businesses postponed their investments in energy efficiency projects due to financial uncertainties and budget limitations. However, as the pandemic progressed, it accelerated certain trends within the EaaS market. The post-pandemic emphasis on sustainability has further increased the demand for EaaS offerings that improve energy usage and efficiency. Therefore, despite short-term challenges, the long-term outlook for the EaaS market remains optimistic in a post-pandemic landscape.

Energy as a Service Market is further segmented by region into:

  • North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
  • Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
  • Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
  • Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
  • Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Energy as a Service Market Scope and Segments:

ATTRIBUTE

  DETAILS

Study Period

2018-2034

Base Year

2023

Forecast Period

2024-2034

Historical Period

2019-2022

Growth Rate

CAGR of 9.8% from 2024-2034

Unit

Value (USD Billion)

Segmentation

Main Segments List

By Service

  • Energy Supply Services
  • Operational and Maintenance Services
  • Energy Efficiency and Optimization Services

By End User

  • Commercial
  • Industrial

By Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • Southeast Asia
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of the Middle East & Africa

Frequently Asked Questions (FAQ):

Energy as a Service Market size was valued at USD 72.6 billion in 2023 and is projected to reach the value of USD 203.9 billion in 2034, exhibiting a CAGR of 9.8% during the forecast period.

Energy as a Service (EaaS) refers to a comprehensive approach that is meant to meet the various energy needs, with the help of external services other than traditional ownership and management of energy-related assets.

The Energy Efficiency and Optimization segment and Commercial segment accounted for the largest Energy as a Service Market share.

Key players in the Energy as a Service Market include Schneider Electric, Engie, Siemens AG, Honeywell International Inc., General Electric, Johnson Controls, Veolia, Duke Energy, Ameresco, Noresco, Trane Technologies, Centrica, Edison Energy, Enel X, NRG Energy and Other Prominent Players.

Improvements in technology, along with regulatory support and incentives are the factors driving the energy as a service market.

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