Global Energy as a Service Market research Report, 2024-29

Market Dynamic

Market Drivers • Operational Flexibility: The flexibility provided by EaaS is another key driver. Companies can access state-of-the-art equipment without long-term commitments, allowing them to respond quickly to changing market demands. The ability to adjust equipment needs seasonally or based on project-specific requirements ensures that businesses are not locked into owning underused assets. This flexibility is particularly crucial in industries such as construction and agriculture, where equipment needs can vary greatly depending on the workload. • Focus on Asset Utilization: The need for better asset utilization is a significant factor boosting the EaaS market. By leasing equipment, businesses can maximize the efficiency of their machinery, ensuring that it is only used when needed. This is especially important in sectors like manufacturing, construction, and agriculture, where equipment utilization rates can fluctuate. The EaaS model allows businesses to reduce idle time and enhance overall productivity by ensuring that the right equipment is available at the right time. Market Challenges • High Dependency on Third-Party Providers: One of the challenges in the EaaS market is the reliance on third-party service providers for equipment maintenance, repairs, and upgrades. This dependency can lead to potential delays, operational interruptions, and reliability concerns. If the provider fails to maintain the equipment properly, businesses may face unexpected downtime or performance issues, affecting their productivity and increasing operational costs. • Complex Contract Negotiations: EaaS agreements can be complex and difficult to navigate. Contract terms may vary based on the service provider, type of equipment, and the industry-specific requirements. Businesses may struggle with understanding the full scope of services, additional charges, and long-term commitments. Lack of standardization in contract terms can lead to confusion, disputes, and potential hidden costs, making it essential for businesses to carefully evaluate leasing contracts before entering into agreements. Market Trends • Expansion of EaaS into Emerging Markets: The global EaaS market is witnessing significant expansion into emerging economies, particularly in Asia-Pacific, Latin America, and Africa. These regions, with their growing infrastructure needs, industrial development, and focus on sustainable growth, offer great potential for EaaS providers. As emerging markets seek to reduce capital expenditure and increase equipment access, the adoption of the EaaS model is projected to rise, expanding market opportunities globally. • Increased Focus on Customer-Centric Solutions: A growing trend in the EaaS market is the focus on providing customer-centric solutions tailored to specific industry needs. Service providers are offering customized equipment bundles, including maintenance, training, and technical support, to meet the unique requirements of different sectors such as construction, agriculture, and energy. This trend enhances customer satisfaction, making the EaaS model more attractive for businesses seeking a comprehensive solution rather than just equipment leasing.

Key Development

• August 2023– Teva Pharmaceuticals, a leading generic pharmaceutical company, took proactive measures to reduce its environmental impact by partnering with Honeywell, a technology company. The partnership aimed to reduce Teva’s energy consumption and carbon emissions at its manufacturing facility in Debrecen. Through Honeywell’s innovative ‘Energy as a Service’ (EaaS) model, Teva will be able to implement energy improvement upgrades without the need for a significant capital investment. • October 2023 – Green Genius, a Lithuanian renewables developer, received funds for an Energy-as-a-Service (EaaS) project. The project will involve an installation of 6.5 MW of solar power and 6 MWh of Battery Energy Storage Systems (BESS) for a Carlsberg A/S brewery in Lithuania. • September 2023 – Sunnova Energy International, Inc., a leading Energy as a Service (EaaS) provider, entered a USD 3 billion partial loan guarantee agreement with the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) to support solar loans originated by Sunnova under a new solar loan channel named “Project Hestia”. This will enhance the development of Energy as a Service (EaaS) projects. • March 2023- Honeywell announced that it had invested in an energy-as-a-service company Redaptive to bring the latter’s capabilities to private sector-owned commercial and industrial buildings.