Increasing Demand for Renewable Energy Drives Renewable Energy-as-a-Service Market

By | June 26, 2024
Global Renewable Energy-as-a-Service Market

Increasing demand for renewable energy and declining cost of renewable energy technologies are likely to drive the market in the forecast period.

According to TechSci Research report, “Renewable Energy-as-a-Service Market – Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2028”, the Global Renewable Energy-as-a-Service Market stood at USD 12.08 billion in 2022 and is anticipated to grow with a CAGR of 11.19% in the forecast period.One of the primary drivers fueling the growth of the global REaaS market is the significant cost savings and financial benefits it offers to consumers, businesses, and organizations. Traditional energy systems, often reliant on fossil fuels, come with substantial operational and maintenance expenses. Additionally, the initial capital investment required to install renewable energy infrastructure, such as solar panels or wind turbines, can be prohibitively high for many potential users.

REaaS addresses these cost barriers by providing an alternative model where customers can access renewable energy without the burden of upfront capital expenditures or ongoing maintenance costs. Instead, they pay for the energy services provided, often on a subscription or pay-as-you-go basis. This financial flexibility enables a broader range of entities to embrace clean energy solutions. Moreover, REaaS agreements frequently include performance guarantees, ensuring that the renewable energy systems operate efficiently and deliver consistent energy output. As a result, customers can predict and manage their energy expenses more effectively, mitigating the risks associated with fluctuating energy prices.

The financial attractiveness of REaaS is further enhanced by declining costs of renewable energy technologies, making it increasingly competitive with conventional fossil fuels. As businesses and individuals seek to reduce energy costs and enhance their financial stability, the affordability and cost-saving potential of REaaS solutions continue to drive market growth.

Environmental sustainability and the pressing need to combat climate change are powerful drivers behind the global REaaS market. The world is grappling with the consequences of carbon emissions from fossil fuels, including rising global temperatures, extreme weather events, and environmental degradation. As a result, there is a growing commitment from governments, corporations, and individuals to reduce their carbon footprint and transition to cleaner, more sustainable energy sources. REaaS plays a pivotal role in this transition by facilitating access to renewable energy, which generates electricity with minimal or no greenhouse gas emissions.

Solar, wind, hydropower, and other renewable sources offer a clean and eco-friendly alternative to conventional fossil fuels, significantly reducing the carbon impact of energy generation. Many countries and regions have set ambitious renewable energy targets and emissions reduction goals as part of their commitment to mitigating climate change. These targets often include specific mandates for the adoption of renewable energy technologies. REaaS aligns with these goals by providing a practical and scalable means of meeting renewable energy targets. Moreover, corporations are increasingly recognizing the importance of corporate social responsibility (CSR) and environmental, social, and governance (ESG) commitments. Embracing REaaS not only helps them achieve their sustainability objectives but also enhances their brand image and appeals to environmentally conscious consumers and investors.

In summary, the global REaaS market is driven by the compelling financial benefits it offers, including cost savings and predictable energy expenses, as well as its alignment with environmental sustainability and carbon reduction goals. These drivers collectively contribute to the expanding adoption of REaaS as a pivotal component of the global transition to cleaner and more environmentally friendly energy solutions.

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The Global Renewable Energy-as-a-Service Market is segmented into type, end user and region.

Based on type, The Energy Supply Services segment held the largest market share in 2022. Energy Supply Services allow customers to access renewable energy without the need for substantial upfront capital investments. This significantly reduces the financial barriers that typically deter businesses, homeowners, and organizations from adopting renewable energy solutions. Instead of bearing the full cost of purchasing and installing renewable energy systems, customers can leverage the expertise and resources of REaaS providers. 

Energy Supply Services typically operate on a predictable pricing model. Customers enter into long-term agreements with fixed or predictable energy costs. This predictability allows businesses to budget effectively and mitigate the risks associated with fluctuating energy prices, making renewable energy a more financially attractive option. REaaS providers are experts in designing, installing, and managing renewable energy systems. They have the technical knowledge and experience required to optimize the performance of these systems, ensuring they operate efficiently and generate the expected energy output.

Customers benefit from this expertise without having to acquire it themselves. With Energy Supply Services, customers are relieved of the responsibility for operating and maintaining renewable energy systems. REaaS providers handle routine maintenance, repairs, and system monitoring. This minimizes operational disruptions and ensures that renewable energy assets remain in optimal working condition throughout the contract period. Energy Supply Services are often scalable to meet the specific energy needs of customers, whether they are homeowners, businesses, or industrial facilities.

Based on end user, The Commercial segment held the largest market share in 2022. Commercial establishments, including office buildings, retail spaces, hotels, and factories, typically have higher energy consumption compared to residential users. This higher energy intensity results in larger energy bills and a stronger financial incentive to seek ways to reduce energy costs. The commercial sector is highly sensitive to operating expenses, including energy costs.

REaaS solutions enable commercial entities to access renewable energy without the need for significant upfront capital investments. Instead, they can shift to clean energy with predictable and often cost-effective payment structures. This financial flexibility is appealing to businesses looking to lower operational costs and improve profitability. Many businesses, driven by CSR objectives, are committed to reducing their environmental impact and carbon footprint.

Transitioning to renewable energy aligns with these sustainability goals and enhances a company’s reputation as an environmentally responsible entity. It can also help meet regulatory requirements related to sustainability reporting and compliance with emissions reduction targets. Adopting REaaS solutions often goes hand in hand with energy efficiency measures. Commercial entities seek to optimize their energy use to reduce waste and enhance competitiveness. Integrating renewable energy sources like solar panels with energy-efficient technologies allows businesses to achieve a more sustainable and cost-efficient energy mix.

Commercial properties often offer more significant rooftop space, land, or building footprint for renewable energy installations. This scale allows for larger and more impactful renewable energy projects. Businesses can generate substantial amounts of clean energy, potentially even producing surplus energy that can be sold back to the grid or used to power neighboring facilities. Many commercial property owners are open to long-term lease agreements with REaaS providers. These agreements allow property owners to monetize underutilized space while providing the REaaS provider with a stable location for renewable energy installations.

Major companies operating in the Global Renewable Energy-as-a-Service Market are:

  • ENGIE Group
  • Enel X S.r.l.
  • Schneider Electric SE
  • Ameresco Inc
  • Siemens AG
  • General Electric Company
  • Veolia Environnement S.A.
  • Honeywell International Inc
  • Centrica Plc
  • Alpiq Group

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“The Global Renewable Energy-as-a-Service market is expected to rise in the upcoming years and register a significant CAGR during the forecast period. The key driver behind the global Renewable Energy-as-a-Service (REaaS) market is the pursuit of cost efficiency and sustainability. REaaS empowers businesses to access clean, renewable energy without hefty upfront investments. By shifting to REaaS, companies can reduce energy costs, enhance financial predictability, and align with sustainability goals. This model offers an efficient path to reducing carbon footprints and showcases corporate responsibility.

Furthermore, it enables businesses to navigate energy market fluctuations while benefiting from expert maintenance and performance guarantees. In essence, REaaS allows enterprises to bolster both their bottom line and environmental stewardship, making it a compelling choice for modern businesses.  Therefore, the market of Renewable Energy-as-a-Service is expected to boost in the upcoming years.,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based management consulting firm.

Renewable Energy-as-a-Service Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028 Segmented By Type (Energy Supply Services, Maintenance & Operation, Energy Efficiency & Optimization and Others),  By End User (Residential, Commercial, Industrial), By Region, By Competition”, has evaluated the future growth potential of Global Renewable Energy-as-a-Service Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision-makers make sound investment decisions., The report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Global Renewable Energy-as-a-Service Market.

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