Why the Service Economy is Embracing Energy Efficiency

Many sectors of the global economy are moving toward an “as-a-service” model—a new way for businesses and consumers to procure products and equipment without taking ownership of them. Platforms like Spotify and Netflix provide entertainment-as-a-service, software-as-a-service is becoming ubiquitous in business, and Uber and Lyft provide transportation-as-a-service. Energy efficiency is no exception: new efficiency-as-a-service offerings are allowing organizations to install energy-efficient equipment without owning it. To that end, working with partners and allies in the Better Buildings Challenge, DOE has developed the Efficiency-as-a-Service Toolkit to help building owners better understand how efficiency-as-a-service works and highlight some of the different models in use.

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 Efficiency-as-a-Service Toolkit features:

  • Case studies from Better Buildings Financial Allies Allumia, Citi, Metrus Energy, Redaptive, and Sparkfund. These resources highlight how each company structures efficiency-as-a-service deals with examples from large and small commercial offices, as well as the healthcare, education, and other sectors.
  • An overview fact sheet explaining how efficiency-as-a-service works, different models in use, and available market data.
  • A webinar featuring two Better Buildings Financial Allies sharing insights on their specific models, and a building owner discussing how efficiency-as-a-service enabled energy efficiency improvements in a healthcare facility.

Efficiency-as-a-service is gaining popularity because it overcomes market barriers that other mechanisms do not, limiting customer performance risk while still providing an avenue for short-term energy and cost savings. Despite this rise in popularity, efficiency-as-a-service is still a poorly-understood concept in energy finance, in part due to the variety of business models in use and a lack of easily-accessible resources on the topic. The Better Buildings Efficiency-as-a-Service Toolkit was developed to help bridge this gap in understanding.

View the Toolkit on the Better Buildings Solution Center: https://betterbuildingssolutioncenter.energy.gov/toolkits/efficiency-a-service.