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Energy as a Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The energy as a service market is expected to grow at a CAGR of 12. 48% during the forecast period of 2022-2027, reaching the value of USD 140. 61 billion by 2027 from USD 71. 60 billion in 2020. The COVID-19 outbreak had no recordable negative impact on the energy-as-a-service market.
New York, June 10, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "Energy as a Service Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06249289/?utm_source=GNW
However, lower revenue collection by the industries and commercial spaces had put the service as the lower priority, instead prioritized on safety and health issues of the employees working on-premises. Factors such as increasing adoption of distributed energy generation in commercial and industrial sectors along with the stringent energy efficiency regulations and supportive government initiatives, are expected to drive the market during forecast period. However, the lack of awareness in developing economies and high technological cost, are likely to hinder the market growth during the forecast period.
Key Highlights
With a significant number of commercial spaces available and high consumption of electricity during 2021, it is expected that the commercial segment is likely to dominate the market during the forecast period.
Energy as a service concept is still at its nascent stage, especially in developing nations, but in developed nations, the service is on-demand. Developing nations like India, Vietnam, Indonesia with high consumption of energy are likely to have ample opportunities for energy as a service market in the forecast period.
North America is expected to witness significant growth during the forecast period, with the majority of the demand coming from the United States.
Key Market Trends
Commercial Segment to Dominate the Market
Electricity use in the commercial building sector globally is increasing rapidly due to increasing per capita income, a growing population, and the increasing number of electrical appliances. Energy use in the residential and commercial sectors is essential for campaigns to conserve energy.
The commercial segment includes establishments such as educational institutions, corporate offices, data centers, hospitals, airports, banks, and others as commercial end users of the energy as a service (EaaS) industry.
According to the International Energy Agency (IEA), the commercial segment accounted for around 22% of the total electricity consumption in 2020 globally. Different commercial buildings have energy applications such as district energy systems and mercantile and service, with higher energy consumption.
Historically, energy-efficiency initiatives have posed a significant challenge for the commercial sector. Lack of awareness and the high capital requirements is often a substantial barrier to the more widespread adoption of energy-efficiency initiatives in the commercial sector.
Various energy models like the energy as a service (EaaS) have removed the capital barrier and provided multiple methods to save energy and costs. The service offers the complete set-up to have efficient commercial space, from installing electrical components to building microgrids.
EaaS allows owners and companies to upgrade their energy systems to clean and sustainable technologies such as rooftop solar PV. The consumers may save electricity bills from the utility company.
In December 2021, Schneider Electric announced the launch of GREENext, a joint venture that will provide Energy-as-a-Service to commercial and industrial customers through solar and battery hybrid microgrid technology.
Moreover, in January 2022, French telecommunications company Orange SA has signed an Energy-as-a-service (EaaS) contract with utility Engie SA to install 355 kWp of solar panels at its data centre in Cote d’Ivoire, West Africa. As part of the agreement, Engie will install the panels on rooftops and carports to help Orange’s main data centre in Africa generate 527 MWh of electricity per year.
With a growing population, energy requirements and energy conservation are essential to maintain its sustainability for a longer duration. Private entities, with government support, are concentrating on the commercial segment to expand its services in the near future.
North America to Witness Significant Growth
North America is one of the prominent regions to have implemented EaaS in various sectors. Especially in the commercial industry, the region has adopted various projects that are expected to increase energy efficiency and would help to cut down its operating expenses.
The United States has inducted a pay-for-performance approach to achieve energy efficiency. It is estimated that the approach can help to cut down energy consumption by nearly 15%. This approach in the country has created an opportunity for various energy or utility companies to extend a service line that can provide services to save electricity.
For instance, in California, energy efficiency policies have mandated that at least 60% of the savings achieved in obligation schemes need to be delivered by third-party service providers. Thus, such measurement in the region is likely to help the market growth during the forecast period.
Furthermore, energy service providers in United States and Canada are investing in smart grid and smart metering systems, as it uses advanced data analytics to enable consumers to optimise energy consumption. According to the Institute of Energy Efficiency, in 2021 an estimated 115 million units of smart meters were installed in the United States witnessing an increase of 27.7% as compared to 2018. Thus, increasing investments in the smart meters in the region is likely to drive the market towards a more decentralized and digitalized grid network and this, in turn, is expected to aid the growth of EaaS market in the region.
Owing to the above points, North America is likely to witness significant growth in energy as a service market in the future forecast period.
Competitive Landscape
The energy as a service market is moderately consolidated. Some of the key players in the market include Schneider Electric SE, Engie SA, Honeywell International Inc, Veolia Environnement SA, and Electricite de France (EDF) SA among others.
Additional Benefits:
The market estimate (ME) sheet in Excel format
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