Energy as a Service (EaaS) is a term for off-balance sheet financing of energy investments. An energy investment can be an investment that reduces energy consumption (efficiency) or produces energy (solar PV, distributed generation, backup power, etc). Depending on the energy investment, the abbreviation may be Energy Efficiency as a Service (EEaaS) or Lighting/Lumens as a Service (LaaS).
The Department of Energy’s Better Building Initiative has a great explanation of Efficiency as a Service:
“Efficiency-as-a-service is a pay-for-performance, off-balance sheet financing solution that allows customers to implement energy and water efficiency projects with no upfront capital expenditure. The provider pays for project development, construction, and maintenance costs. Once a project is operational, the customer makes service payments that are based on actual energy savings or other equipment performance metrics, resulting in immediate reduced operating expenses. The energy services agreement (ESA) is the most common type of arrangement, but other models such as lumens-as-a-service and energy subscription agreements are also in use.”
Many in the industry are capitalizing on the new “. as a Service” term to drive marketing and sales efforts, but how many companies actually specialize in energy related “. as a Service”? For the purpose of this article, a company is considered “.aaS” if it handles the overall project development, financing, maintenance, and customer billing. In other words, the company represented by the green square in the below diagram (found from a presentation by Eco Engineering on LaaS).
Below is a list of “. as a Service” companies focused on Efficiency/Lighting. While there are many financing groups that offer “.aaS” this article is only focusing on companies that have “.aaS” as their core business model. Also, there are many energy manufacturers and contractors marketing “.aaS” but if they don’t actually handle the billing they aren’t included. Finally, while traditional large energy service companies (ESCO) focus on Government and MUSH Market (Municipal, University, Schools, Hospitals), “.aaS” companies are mainly focuses on Commercial and Industrial (C&I) customers. This has to do with the shorter investment time horizons C&I have vs. Government/MUSH.
| “.aaS” Company Name | HQ Location | Focus/Specialty |
| Allumia | Seattle, WA | Lighting |
| Budderfly | Shelton, CT | Comprehensive |
| Carbon Lighthouse | San Francisco, CA | Heavy Data, Commercial Office |
| Empower Equity | New York, NY | Comprehensive, $30k – $2 Mil |
| Future Energy Solutions | Ft. Lauderdale, FL | Lighting |
| Metrus | San Francisco, CA | Comprehensive |
| Onsite Utility Services Capital | Delavan, WI | Comprehensive |
| Redaptive | San Francisco, CA | Speed, scalability, > $1 Mil |
| Renew Energy Partners | Boston, MA | Deep Energy Retrofits |
| Sparkfund | Washington, D.C. | Comprehensive |
Need help finding an Energy as a Service company for your project? Email info@tetrasustainable.com!
Please send any changes you’d like to see or company submittals to info@tetrasustainable.com. Depending on the amount of information on their website, we may ask for a sample customer bill (with any private information hidden) to verify the company is a true “.aaS”.
Helpful Links/Quotes:
LED Magazine Lighting as a Service : “We sell state-of-the-art light, and we sell cash flow,” said Slawomir Huss, head of Signify Capital Europe, noting that the bank is invisible to the end user but is involved in an innovative manner. “You no longer finance the asset as such. You finance the cash flow that is generated via the project. So if you have the old electricity bill from the old traditional lighting and you get a saving thanks to LEDification of, let’s say, 70%, 75%, then this 70–75% is actually the asset that the financial institution will finance.”” and:
“In a benefit that will become especially pronounced with upcoming changes to both FASB (Financial Accounting Standards Board) accounting rules in the US and to IFRS (International Financial Reporting Standards) in many other countries, LaaS will enable end users to treat the financing as “off-balance-sheet,” a benefit that makes it easier for companies to borrow money they need for those other strategic projects. While operating leases today also qualify for off-balance-sheet treatment, that is set to change when the stricter regulations take hold on Jan. 1, 2019, when they will show as debt on the balance sheet.”
https://www.utilitydive.com/news/utilities-see-opportunity-in-energy-as-a-service-offerings/544973/