The world’s reliance on energy has continued to grow at an exponential rate almost every year. After a dip in 2020, 2021 saw a massive rebound and record increase in consumption. This has been coupled with energy costs, which have similarly skyrocketed, and continue to behave with volatility due to geopolitical and economic factors.
Forbes recently threw some light on the rising costs of energy, and the warning signs that are flashing at investors. Gasoline prices are 25% higher than two years back, gas stations are concerned about running out of gas and nobody is prepared to deal with an energy crisis. In short, it is not just a problem for investors, but for the entire world.
With non-renewables’ decreasing popularity and an increase in the preference for decentralized power generation, energy as a service is naturally gaining interest. Moreover, the increase in low cost renewable power generation and technological advancements in the power industry have brought the leap to renewable energy closer to reality.
As the world moves towards sustainable energy models, the energy as a service model is one of the more popular options. Does power without a power plant seem like an unlikely business model? Is it too far-fetched and futuristic to appeal to today’s consumers? Read on to find out more about energy as a service.
What is Energy as a Service?
Energy as a service (EaaS) is defined as a service provider offering the customer access to energy and management services without any associated upfront costs through a contract with the organization. The customer pays only for ongoing services and avoids infrastructure and equipment charges, much like a software as a service model. These services are specifically tailored to the customer’s goals, whether it is to reduce energy usage, be more sustainable or improve their bottom line.
Engaging in EaaS helps to practice sustainability, while reducing the burden of capital and performance on the client. Contrary to today’s narrative of asset-focused centralized power generation and sale to customers who passively consume, EaaS manages energy assets and services end to end.
Client resources are combined into an energy community, merging markets, offering load balancing solutions, and upgrading the grid to power modern cities. It is an integral part of the modern energy management conversation and can efficiently improve related assets.
How Does the Energy as a Service Model Work?
The essence of the EaaS business model is a revolution of companies and experts trying to regain energy spending controls. EaaS ensures that you save energy as well as stabilizing supply and providing access to advanced technology.
EaaS acts as a delivery model that takes hardware, software, and services with highly sustainable energy platforms and synchronizes them across the grid. It is an interconnection of physical devices fed by data-driven products and decisions to increase efficiency. The key incentives for implementing these features are:
- Customers are more likely to pay for a subscription model package deal rather than per unit consumption
- Providers will either improve the efficiency or improve methods of procuring, storing, and producing energy
- Improved data-driven decisions, avoiding direct payments and expensive upgrades
Why is Energy as a Service Important?
The EaaS model is being employed by a number of organizations. This may be due to the decline of non-renewables, the better ROI, or the need for sustainable and decentralized power. Whatever the reason, the European market for Energy as a service alone is projected to grow at a CAGR of 14.8% from 2021 to 2027.
Globally, companies have already started adopting EaaS solutions. There are several particular reasons why the EaaS model is essential to ensure better management of energy and more efficient utilization of assets.
Increasing Demand for Energy
The need for energy is going up continuously. By 2040 electricity generation is expected to increase by 52%. The International Energy Association estimates that the energy demands from emerging markets and developing economies will cause a 27% increase in global energy demand. Without continuous efficiency improvements, the world would need to produce twice as much energy as it does today.
Better Management of Resources
Fossil fuels supply 84% of the world’s energy, which is cause for concern. What’s even more alarming is that they are on the path to running out. However, there is a way out- renewables. Renewable energy coupled with EaaS can give customers a practical way to harness energy responsibly, with companies taking responsibility for infrastructure and technology.
Make Use of Digitalization
Digital technology-based spending is expected to rise 400% from $600 billion in 2017 to a whopping $2.39 trillion in 2024. This demonstrates the importance of digitalization across industries. The power and energy sector is no different.
With a variety of datasets, IoT for monitoring, and continuous logging available, the energy sector can only achieve efficiency if it uses digitalization. Modulating energy consumption with a demand response algorithm or a subscription model for EV chargers are all stepping stones to the world of Energy as a Service.
Corporate Social Responsibility
Large carbon footprints are a cause for concern for many individuals and companies. Carbon use is a major contributor to climate change as well. Thus, people and companies are looking for ways to reduce their carbon footprints with low carbon technologies and renewable energy sources. However, installation, maintenance, and efficiency can be a challenge.
Sustainable and Cost-Effective Energy
The energy sector might be stubborn, but an overhaul with EaaS can ensure sustainable and cost-effective solutions for consumers. EaaS can help reduce operations costs and increase engagement in clean energy practices, especially for energy-intensive industries like telecom, data centers and HVAC.
EaaS ensures quick, smooth, and personalized services with better management of energy resources so that customers have access to a seamless energy experience. In addition, EaaS can also show that it is possible to leverage existing power supplies more efficiently with smart insights and better analytics.
Current Use Cases of Energy as a Service
EaaS models have been implemented in Australia, China, Finland, Ireland, Italy, Japan, Sweden, the UK, and the US, with India and South Africa taking national-level initiatives. Some of the main use cases include:
Smart Home Solutions
Energy advice, management, and installation – important for smart home and office environments – can all be managed with the help of EaaS. The holistic nature of these services offers prebuilt data integration that provides insights and regulates energy usage.
Solar and Wind Energy Solutions
Solar and wind are looking bright as the future of renewable energy. There are projects and companies bringing such solutions within the framework of smart homes, making energy subscriptions cost-effective and clean.
Corporate Social Responsibility
Current solutions ensure that electric vehicle batteries can charge or discharge to smart grids, with smart metering, automated control, and information management. Another side of that coin is the decentralized microgrids that provide hybrid options with localized control and ownership of assets.
Galooli’s Solution for Energy as a Service
Galooli is a leading provider of solutions to optimize EaaS. We offer solutions for every consumer’s need and make energy as a service effortless for the end user.
Galooli offers real-time data monitoring and management to show the health of your energy assets, energy consumption, maintenance requirement checks, and more. You can monitor and manage your energy systems from anywhere with our remote applications.
In addition, Galooli offers you an accessible interactive dashboard that contains key insights from your data, so you know exactly what is going on at all times. Move towards a better future for energy with full visibility over your assets with 5G connectivity.
Galooli’s solution provides cleaner, more reliable, and more efficient energy for on-site energy requirements, microgrids, data centers, or any other industrial facilities. With Galooli’s RMM, you can save time spent deciphering data and instead focus on data-driven decisions. So get in touch, and be part of a cleaner, greener tomorrow!