When companies like Uber entered the transportation industry, many saw it as an unlikely addition to the already growing business. An even bigger faction thought that failure was imminent. However, today, they are quite profitable, and not seen as an absurd business model. Something similar is happening in the power industry today.
Forbes recently threw some light on the rising costs of energy, and the warning signs it was flashing investors. Gasoline prices are 25% higher than two years back, gas stations might run out of gas and an energy crisis is not something we are prepared to deal with. In short, it is not just a problem for investors, but rather for all of us.
With non-renewables decreasing rapidly, and an increase in the preference for decentralization of power generation, it is natural that energy as a service is gaining interest. The increase in low cost renewable power generation and technological advancements in the power industry have made this leap possible.
As the world moves towards sustainable energy models, energy as a service model is widely seen as favorable. 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 is defined as when a service provider offers the customer access to energy and management services, without any associated upfront costs through a contract with the organization. The customer pays only for the services that are ongoing, and avoids infrastructure and equipment charges, much like a software as a service model. These services are specifically for the customer’s goals, whether it is to reduce energy, be more sustainable or the like.
It helps to practice sustainability, while reducing the burden of capital and performance on the client. From today’s asset-focused centralized power generation narrative and its 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 help manage energy and related assets effectively.
How Does the Energy as a Service Model Work?
The essence of the EaaS business model is the revolution of companies and experts to regain energy spending controls. EaaS ensures that you save energy as well as get energy and access to advanced technology.
EaaS acts as a delivery model that puts hardware, software, and services with highly sustainable energy platforms synchronized across the grid. It is an interconnection of physical devices and is driven by data-driven products and decisions with better efficiency. The key features of the implementation are
- Customers are 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.
- Helps with data-driven decisions, avoid direct payments and expensive upgrades, and so on.
Why is Energy as a Service Important?
The Energy as a service 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 a number of reasons as to why energy as a service 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. The electricity generation by 2040 is expected to increase by 52%. The International Energy Association estimates that the energy demands from emerging markets and developing economies would cause a 27% increase in world energy demand. Without continuous efficiency improvements, the world would need twice the energy it uses 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 from $0.6 trillion in 2017 to a whopping $2.39 trillion in 2024. This shows the role that digitalization has 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 be as efficient as it can 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 the Energy as a Service model.
Corporate Social Responsibility
High carbon footprint is a cause of concern for individuals, as well as companies. It 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, renewable energy sources, and so on. 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. Energy as a service model can help reduce operations costs and engage in clean energy practices, especially for industries like telecom, data centers, HVAC, and more, which are generally energy-intensive.
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, as seen with this case study.
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, installation, and so on, which are important for smart home and office environments, are managed with the help of EaaS. The holistic nature of these services ensures better services that offer insights and regulate energy usage.
Energy Efficient technology
Energy-efficient technology is always preferable, and EaaS comes with this guarantee. Kauai Beach Resort entered into a 15-year long EaaS subscription to restore, update and replace energy equipment to ensure energy-efficient technology.
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.
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.
Current Energy as a Service models integrated with IoT offer dashboards and platforms that offer analytics, real-time data, and algorithm-based metering to ensure better data visibility and clearer insights for energy consumption and management decisions.
Galooli’s Solution for Energy as a Service
Galooli is a leading provider of solutions to optimize Energy as a Service. 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 interactive dashboard that is easy to use and contains key insights from your data, so you know exactly what you are looking at. Move towards a better future for energy with full visibility over your assets with 5G connectivity.
Galooli’s solution provides cleaner, more reliable, and efficient energy, whether it is for on-site energy requirements, microgrids, data centers, or any other industrial facilities. With Galooli’s RMM, you can save the time you spent deciphering data, and instead, focus on data-driven decisions. So get in touch, and be part of a cleaner, greener tomorrow!