Efficiency as a service (EaaS) is a business model that creates the right conditions for SMEs (and also larger companies) to access new climate-friendlier technologies without the need to provide up-front capital investment for more efficient and more expensive equipment. Thus, the EaaS model effectively removes market barriers by shifting the energy efficiency costs from an expensive, high-capital expenditure to a transparent, lower-risk operating expenditure, freeing up capital to other investment priorities. The model also creates an alignment of incentives: it reduces the perceived technology risk for the customers as they are not required to invest in the technologies, while they are also incentivised to cut unnecessary consumption as they are charged per usage; and it gives technology providers the chance to optimise the operation of the equipment to reduce running costs by giving the customer the most energy efficient technologies on the market. In addition, the EaaS model also supports a circular-economy model, by incentivising technology providers to make their equipment modular, with parts being reusable/remanufactured/and recyclable.
Servitisation represents an effective way to increase investments in energy efficiency needed for the economic recovery after COVID-19 and to deliver the EU targets, the Paris Agreement goals and achieve a low-carbon circular economy; indeed energy efficiency alone represents 35% of the solution to reach the climate targets. EaaS provides a long-term appealing solution to engage on a more sustainable path to Net Zero.
The overall objective of this 3-year project, launched June 2020, is to mainstream the servitisation financial model in three high potential countries in Europe – Spain, Netherland and Belgium – where energy prices are high, the concentration of SMEs is strong and the countries have shown to be early adopters of innovation. Belgium, Spain and The Netherlands are ideal candidates to disrupt the market of energy efficiency and facilitate SMEs to have access to high efficient systems.
To successfully support the markets in adopting the model, the team developed a toolkit to guide companies to offer the approach. This toolkit included the design of standardised contracts (for each country), pricing models, risk mitigation mechanisms and marketing material. In addition, a website was developed to disseminate information on the project, tools, news, and case studies created. For case studies, three videos were published: Danfoss and Aneo Retail offering Refrigeration as a Service in the retail sector, Signify with Light as a Service in industry, and EDF with Battery as a Service for the food and beverage industry.
Beyond the latter, the team supported stakeholders in implementing the model in their operations (solution providers, financiers, and customers). The team successfully managed to build the pipeline and managed to have a couple of projects signed; one in Spain with a sports center (with cooling), and one in Belgium with a nursery school (with ventilation). However, initially the team was aiming to have several millions worth of contracts signed, but challenges occurred which slowed down activities with stakeholders (among which COVID, the war in Ukraine but also challenges in implementing the model within companies' operations as well as time required for negotiations with customers) . The team deployed mitigation strategies to overcome these, but considerably more time was required to build capacity within the market.
