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In the energy sector, 'As a Service' business models have emerged as key catalysts in responding to increased demand to achieve the transition to cleaner energy sources and the decarbonization of all our activities. These models, which have emerged as alternative forms of purchasing and procurement, not only offer practical and efficient solutions, but also play a crucial role in achieving the climate targets set at both European and national level.
In this post, we explore in depth the on-demand energy services business models known as "As a Service".
Climate commitmentsand regulatory framework.
The European Union, in its fight against climate change, has set itself the goal of achieving climate neutrality by 2050. This ambitious goal is reflected in the European Green Deal, which sets out measures to reduce greenhouse gas (GHG) emissions. At the European and national level, various commitments and agreements have been implemented, such as the Net Zero Industry Act, the reform of the Energy Efficiency Directive, and the Comprehensive National Energy and Climate Plan (PNIEC), which set clear targets for decarbonization and the promotion of renewable energies.
Challenges and solutions for decarbonization
Industry and buildings represent key sectors in the fight against climate change, being responsible for a significant part of GHG emissions. In this context, investment in more efficient technologies and the transition to renewable energies become urgent priorities. As a Service" models offer a promising avenue to address these challenges, allowing companies to access advanced energy solutions without the need for costly upfront investments.
Among the available formats of "As a Service" models are leasing and renting, which appear as flexible alternatives for the adoption of renewable energy supplies that do not require large costs and facilitate the achievement of the companies' objectives. These are the main characteristics:
Leasing
Through leasing, users can finance solar panels without the need to do so through a bank. It is the company offering the leasing service that takes care of the entire initial investment, without the beneficiary having to make any financial effort. The payment of the installation is made in the terms agreed with the installation company. At the end of this period, the photovoltaic installation becomes the property of the company. In legal terms, this activity is registered as a commercial operation, which means that it appears both on the balance sheet and in CIRBE.
Renting
Solar panel renting or leasing works in a similar way to leasing, since the user can benefit from a self-consumption installation without making an initial investment and paying for the solar panel rental on a monthly basis. The difference is that, in solar panel leasing, in addition to having the option of paying for the installation in monthly installments, a series of additional services are included, such as maintenance, operation and updating of the installed equipment. On an economic and financial level, unlike leasing, leasing is off CIRBE and off balance sheet, making it a very positive operation for companies.
PPA
The Power Purchase Agreement (PPA) is another key model within "As a Service" energy services. In a PPA, a consumer (usually a company or a public entity) agrees to purchase long-term power from a renewable energy supplier at an agreed price. This price is usually set below the cost of energy from the conventional power grid, which provides significant savings over time and guarantees a stable supply of clean energy.
The PPA allows consumers to access renewable energy without incurring the upfront costs of installing and maintaining power generation assets. This means that companies can benefit from clean energy without the need to commit upfront capital or financial resources. Furthermore, by outsourcing renewable energy generation, organizations can focus on their core business while actively contributing to the transition to a more sustainable energy system.
Benefits of "As a Service" Models
Cost and risk reduction: "As a Service" models allow companies to reduce operating costs and transfer the risks associated with investing in energy infrastructure to specialized third parties, such as Energy Service Companies (ESCOs). In addition, through these models, companies leverage the knowledge of suppliers, not just their structure, which adds additional value to the service.
Access to advanced technology: Energy service providers offer solutions based on cutting-edge technologies, such as artificial intelligence and the Internet of Things, allowing companies to benefit from innovation without having to invest in technological development.
Flexibility and scalability: "As a Service" models offer companies the flexibility to adapt to market fluctuations and scale their operations as needed, enabling more efficient and sustainable management of energy resources.
From energy management as a service to energy efficiency in buildings and energy network optimization, "As a Service" models are proving to be an effective solution to drive decarbonization across all sectors. With a collaborative and innovative approach, these models are contributing to building a more sustainable and resilient energy future for generations to come.
