Energy as a Service Market Analysis Report By Service, By End User, By Region And Segment Forecasts From 2020 To 2027

Industry Insights

The global energy as a service (EaaS) market size was accounted for USD 58.04 billion in 2019. It is projected to grow at a CAGR of 14.6% over the forecast period from 2020 to 2027. Rising distributed energy resources, reduced cost of storage solutions & renewable power, and tax benefits for projects are projected to drive the market growth. Additionally, with the growing demand for renewable energy, price volatility is expected to support the market growth.

In developing countries, energy as a service is still at an early stage. The market is fragmented depending upon the end-user and service type. The services segment comprises supply, assessment, and usage management. Several energy providers are emphasizing collaborations and partnerships to increase their reach across the globe. Countries such as Canada and the U.S. have set regulations and policies regarding the adoption of energy as a service (EaaS) solution.

In addition, growing emphasis on non-renewable and renewable energy sources owing to its low cost, energy-efficient, and lesser carbon footprint is projected to bolster the market growth. Furthermore, rising government funding & investment for promoting renewable energy is also expected to positively impact the market growth.

EaaS also provide consumers flexibility in ownerships and pricing. These services also help operators in customizing energy generation systems depending on power requirements. EaaS offer rapid assimilation for string energy assets by the use of distributed energy systems.

End-user Insights

Based on the end-user, the energy as a service market is fragmented into industrial and commercial users. The commercial end-user segment is estimated to grow at the highest CAGR over the forecasted period. This segment is comprised of establishments like information centers, healthcare institutes, airports, educational institutes, and others. In the commercial segment buildings solely constitute over 30.0% of total consumption. In the U.S., around 50.0% of the energy used in the commercial sector is attributed to heating and lighting applications.       

In the commercial sector, the growth is constituted by growing floor area, service admittance, and occupancy with the rising population.  EaaSsolution helps in providing technical expertise to commercial owners. Mercantile and service building largely contribute to energy consumption and are expected to drive market growth.

The industrial segment is projected to account for the largest share in the overall market, due to mandatory energy service operation in the commercial sector. This change is mainly owing to economic reforms.

Service Insights

Based on services, the EaaSmarket is fragmented into supply, optimization, and demand services. In 2019, the demand services type segment led the market with the highest share and is estimated to continue its dominance in the next few years. Due to changing prices customers are seeking efficient energy supply solutions.

Energy optimization type service is projected to grow at the highest CAGR during the forecasted period. A growing number of supportive government initiatives with emphasis on renewable energy& energy conservation system is projected to support market growth.

Regional Insights

North America is estimated to account for the highest market share by the end of 2027. This growth is mainly due to the high presence of building automation vendors in the region. Key players focus on reducing costs to provide a greater consumer experience & enhanced service.

Asia Pacific is projected to grow at a significant rate of CAGR over the forecasted period, owing to rising industrial development across the region. For example, in 2019, India has over 300 proposed smart city projects costing around USD 2.0 billion. However, fossil fuel needs for electricity generation are expected to offer ample growth opportunities for EaaSmarket growth.

The European market is anticipated to grow at a substantial rate from 2020 to 2027. The region has the presence of major service providers operating in the global market. Moreover, the presence of large & small enterprises across countries like Greece, Belgium, and Cyprus is boosting the market growth.

Impact of COVID-19

COVID-19 pandemic has negatively impacted the global market. The coronavirus crisis has affected all the sectors including tourism, aviation, manufacturing hospitality, and automotive. The energy or power sector is also impacted drastically during the pandemic due to fluctuating demand from electricity and price reduction. Europe is already facing challenges to optimize electricity prices. Distribution system operators have delayed their projects owing to supply chain disruption.

However, the lockdown situation has its limit on the transportation of energy equipment including wind turbines, batteries, and others. Thus, companies operating renewable energy services are not able to install equipment and comply with project deadlines. For instance, in India, 3,000 MW of wind & solar energy projects are facing delays in their operation.

Energy as Service Market Share Insights

The market is projected to grow at a significant rate owing to high demand from small & large enterprises for better accessibility to energy sources. Several key players are undertaking contracts for energy-efficient and distributed energy (DER) solutions.

In addition, the introduction of free service, and pay on the time of delivery is projected to contribute to market growth. Furthermore, with the rising adoption of electric vehicles, smart city projects are also fostering market growth.

Leading players in the market include Siemens; Schneider Electric; Honeywell International Inc.; Engie; Veolia; EDF; and Enel X S.r.l. Key participants in the industry are continuously engaged in developing innovative & effective energy management solutions. Moreover, the growing adoption of smart technologies in the energy & power sector is encouraging manufacturers to develop cloud-hosted energy systems and to have a competitive edge over other players. For example, in 2020, Schneider Electric has introduced Cloud-hosted power management solutions for smart grid operations.

Report Scope

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 and opportunities in each of the sub-segments from 2016 to 2027. For this study, Million Insights has segmented the global energy as a service market report based on 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
        • U.S.
        • Canada
        • Mexico
    • Europe
        • France
        • Germany
        • U.K.
    • The Asia Pacific
        • China
        • India
        • Japan
        • South Korea
    • Central & South America
        • Brazil
    • Middle East &Africa (MEA)
        • Saudi Arabia