How The Energy As A Service (EaaS) Business Model Works

Until recently, most corporate leaders and facilities managers viewed energy to be an out-of-control spending line item. It was often seen as a fixed cost—a necessary component of day-to-day operations that were subject to fluctuating regulations and uncertain markets. And, while it’s general knowledge that there are a variety of energy sources and types available, no one in-house knew enough about the market to investigate them, let alone advocate big changes in this area with certainty.
Enter the energy as a service business model, which is transforming how businesses think about and spend money on energy.
So, what is Energy-as-a-Service (EaaS), and is it appropriate for your building or company? Continue reading to learn more.

What is the Energy as a Service business model?

It’s still true that there are many different types and sources of energy accessible, and it’s also true that most companies don’t have in-house energy experts. However, constant average annual rises in energy costs, along with the fact that energy accounts for a significant amount of most organizations’ operating budgets, has prompted many business executives to look for a better approach to managing this major annual expense.

The energy as a service business model is based on enterprises collaborating with outside specialists in order to recover control over their energy spending.

Energy specialists (also known as energy resource consultants) have an extensive understanding of the industry. When you work with a company that provides energy as a service, their expertise is applied to your organization directly.

Your EaaS partner investigates all elements of your present energy supply and management methods and, using that information and their industry knowledge, finds cost-cutting opportunities.

In general, an EaaS provider will offer advice in two areas:

• Methods for conserving energy or making your daily operations more energy efficient.
• You can receive energy in a variety of ways, including how you make and store it.

The nicest aspect about an EaaS connection is that you’ll always save money. If the improvements made do not result in the anticipated savings, the energy as a service firm will compensate.

Many businesses choose the energy as a service business model because it not only provides them with significant expertise in a difficult field, but it also ensures that they will save money on future electricity bills.

How The Energy As A Service Business Model Produces Savings

• EaaS partners determine ways you can save energy.

You probably have no idea how much your building’s energy use costs over the course of a year. You’re also unlikely to know how the majority of your facility’s energy is used. 

An energy consultant investigates your building’s energy profile in order to determine the best ways to control and optimize energy efficiency.

They will, for example, keep track of your building’s energy use habits. Measuring the energy consumption of all of your electronic equipment’s, such as HVAC units, compressors, elevator motors, air handlers, pumps, fans, lights and many more.

What sorts of equipment consume the most energy, and when are they in use? It’s feasible to start creating new strategies for running vital (but expensive) equipment by comparing that data to utility time of use costs or to discover gear that’s underperforming and needs to be replaced, by comparing that data to utility time of use charges. They may also check your lighting levels and patterns, as well as monitor CO2 levels to evaluate how efficiently you are drawing in outside air, which is then heated or cooled.

EaaS businesses use complex machine learning technologies that can be customized to your building to find savings opportunities, resulting in more accurate recommendations.

Energy As A Service: The Benefits Of High Technology

When you work with energy as a service provider, you frequently receive the advantage of cutting-edge technology as well as energy expertise.

• Sensors installed to your vital equipment that is connected to the Internet of Things (IoT) collect real-time data at a granular level.
• Advanced analytics platforms analyze the numbers for you to see how much money you could save.

Monitoring and analyzing an HVAC pump, for example, could provide the detailed insights needed to understand not only how much energy a pump uses and when, but also how environmental factors influenced usage—for example if the outside temperature was hotter than normal during a particular period or the thermostat was set to a lower temperature than normal. As a result, you’ll not only obtain efficiency tips, but you’ll also be able to see the precise dollar amount per hour you’d save if you implemented them.

Even after your EaaS partner’s initial modifications have been implemented, you can continue to save money by utilizing the technology it provides in the long run.

• EaaS partners assess your current energy purchasing program and recommend different ways to procure, produce and store the energy you use.

When it comes to energy, you have options, some of which may be less expensive than what you’re now consuming. You may simply be unaware of them or unsure of how to use them. Furthermore, some businesses undergo an energy audit for reasons other than cost reductions; they may be more concerned with long-term sustainability.

Many businesses that want to be green are relying more on renewable energy sources like solar electricity. (It’s already being used by more than 100 Fortune 500 businesses, with good results.) Wind and solar electricity are becoming more popular thanks to companies like Apple. By assisting you in the construction, financing, and operation of a local solar power plant, energy as a service partner can help you gain access to solar power.

If the plant is owned by a third party, you can buy the power generated by signing a solar power purchase agreement (PPA) or a virtual power purchase agreement (VPPA), in which you agree to buy renewable energy from an off-site solar farm for a set fee.

The EaaS connection includes introducing you to numerous energy generation possibilities. Whether it’s a solar farm, generators, microgrid, combined heat, and power, or another way of power generation, your EaaS partner will assess alternative power sources and recommend one or more that will help you meet your savings and/or sustainability goals.

Similarly, you can use an on-site or local technique of energy storage. When it comes to lowering your demand charge, having a mechanism to store energy gives your facility greater options. You can draw electricity from your own storage system instead of relying on the grid during peak periods (when demand exceeds supply and utilities charge more), lowering costs dramatically. Your energy as a service partner can assist you in exploring the various energy storage solutions that are emerging.