Published on 08th January 2020
Energy-as-a-Service (EaaS) is emerging as an innovative approach for obtaining reliable power supply, predictability of pricing, and meeting sustainability goals.
There is a growing trend among commercial and industrial (C&I) energy users preferring energy storage “as-a-service” (ESaaS). In this type of cases, typically, the energy storage provider and energy user enter into long or medium-term service agreements for receiving the energy services desired at a price point that is known and predictable. This kind of an arrangement is similar to a subscription model or like a power purchase agreement (PPA), or Energy Service Agreement (ESA) where the energy user pays a fee to the energy storage provider, who, in turn, commits to delivering reliable power, and significant energy savings to the customer.
In the US, C&I users of electricity are charged premiums for the portion of their power drawn from the electric grid during peak times every month. In some cases, these demand charges can make up around 50% of a C&I customer’s total energy bill.
In the case of ESaaS, the energy storage companies can store electricity during non-peak periods and discharge the power to energy users during peak periods, and/or they can integrate this technology with a mix of distributed energy resources (DER), which helps the energy users to mitigate those peak demand charges, in turn, bringing potential cost savings to the customer.
This attractive economic proposition by the ESaaS providers presents energy users with long-term price security, simplicity, security of supply, enabling them to meet their environment, and sustainability goals.
Many C&I companies are uninterested in the business of managing their energy. Instead, these C&I companies are looking for service providers who can provide fully integrated energy services solutions and guarantee energy savings without CapEx and removes technical, financial, regulatory, and operational risks.