Utilities and Energy Efficiency as a Service: The Potential for Win-Win Partnerships

Energy efficiency as a service (EEaaS) is a valuable tool in which the upfront costs of energy efficiency upgrades are paid for by the savings they will ultimately generate; all of this is arranged under a long-term contract. Scaling efficiency investment in commercial and industrial facilities, often through deep retrofits, is essential to meeting climate goals, and our research shows that utilities can also benefit from involvement. Utility programs that use EEaaS are mostly in the pilot phase but can produce substantial energy savings for customers. There are a number of approaches utilities can take to get involved with EEaaS and expand energy efficiency programs, including administering an EEaaS program directly or partnering with existing EEaaS vendors. Currently, a wide variety of EEaaS-like options are on the market; a more standard product or approach could reduce the customer-acquisition and transaction costs associated with EEaaS arrangements. Increased consumer awareness and education are also necessary to help scale the EEaaS market.

This research synthesizes insights into the current EEaaS market and identifies opportunities and challenges to be aware of when scaling these services. The report shows how EEaaS can provide added value to energy users, energy efficiency service providers, and utilities.