EaaS Initiative

EaaS is a pay-per-use model where the end-customers only pay for the service they receive, rather than the physical product or infrastructure that delivers the service

EaaS Corner Image
In June 2020, BASE, AGORIA, ANESE and Innoenergy with funding received from the European Union’s Horizon 2020 research and innovation programme launched the Efficiency as a Service (EaaS) initiative. The project aims to develop and deploy the servitisation (or pay-per-use) model and a financial structure to enable the transition and accelerate the market adoption of energy efficient solutions by Small and Medium-sized Enterprises (SMEs) in Belgium, the Netherlands and Spain. EaaS is a pay-per-use model where the end-customers only pay for the service they receive, rather than the physical product or infrastructure that delivers the service. In this case, the technology provider installs and maintains the equipment and recovers costs through periodic customer payments. These payments are fixed-cost-per-unit for the energy efficient service delivered (for example, euros per cubic meter of compressed air, per tonne of refrigeration, or hours of lighting), and are based on actual usage.
The EaaS model creates conditions for SMEs to access new climate-friendlier technologies without the need to provide up-front capital investment for more efficient and more expensive equipment. Thus, EaaS project 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/recyclable.

EaaS Background

Context

For long, energy efficiency has been one of the most underrated opportunities to reduce our carbon emissions. Since 1975 energy efficiency measures have been responsible for reducing 30 times more carbon emissions than clean energy. End-use energy efficiency alone can deliver 35 per cent of the cumulative CO2 savings through 2050 required to meet the climate goals of the Paris Agreement.

Although energy efficient technologies are available, there are still several barriers that prevent it from being deployed at its full potential, including high up-front costs, higher-risks perception, uncertain returns, other priority investments, lack of maintenance skills and limited financing options.

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 economy.

History of EaaS

Servitisation is not yet well recognised in the asset finance industry. The servitisation model for energy efficiency is a financial model that is well suited to help SMEs to incorporate energy efficient solutions without distracting their limited capital and reducing significantly the perceived risks.

Through this innovative business model, BASE has developed Cooling as a Service (CaaS) a pay-per-use business model that overcomes key market and financial barriers to increase and accelerate the adoption of energy efficient cooling technologies and the use of climate-friendly refrigerants gases. In 2019, CaaS was recognised as the most innovative, actionable and scalable financial instrument to scale up investments in climate change mitigation for sustainable cities by the Global Innovation Lab for Climate Finance.

The Efficiency as a Service (EaaS) initiative was born with the goal to bring the learnings from CaaS to Europe and including all energy efficient equipments to broaden the impact of servitisation in the energy sector.

Implementers

Base EaaS Logo
The Basel Agency for Sustainable Energy (BASE) is a Swiss foundation and a specialised partner of UN Environment founded in 2001. BASE develops innovative, actionable financial strategies and market-driven solutions to unlock investment in sustainable energy and to tackle climate change.
Agoria Logo
Agoria is the Belgian Federation of technology Industry, bringing together nearly 2000 companies. Agoria is paving the way for all technology-inspired companies in Belgium that strive for progress in the world through the development or application of innovations.
Anese Logo
ANESE, National Association of ESCOs, is a benchmark for investment in energy saving and efficiency. ANESE structures and promotes the market for efficient and sustainable energy services that include high technologies and investments, focused on enabling the energy transition and mitigating climate change.
EIT EaaS Logo
Established in 2010 as a Knowledge and Innovation Community (KIC) supported by the European Institute of Innovation and Technology (EIT), InnoEnergy brings together the three elements of the Knowledge Triangle – higher education, research and industry. InnoEnergy supports and invests in new ideas, products and solutions that make a real difference, and new businesses and people to deliver them to market.