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

Given the urgency of the climate crisis, long-term strategies have called for reducing total U.S. greenhouse gas (GHG) emissions by 80–100% by 2050. Fortunately, energy efficiency opportunities have the potential to cut U.S. energy use and GHG emissions in half by 2050. Grants, rebates, and other incentives for energy efficiency from utility and similar programs will not be enough to reach efficiency goals and targets, and the upfront capital needed for energy efficiency investment often requires a financing solution, particularly for retrofits and other major energy equipment or system upgrades.

Much of the growth in the energy efficiency financing marketplace has come from private sources of capital and financial arrangements, such as energy service performance contracting (ESPC) and the evolving energy service agreement (ESA) market. Energy efficiency as a service (EEaaS) is a partnership between a customer and a vendor that provides EEaaS; most commonly it incorporates an ESA structure to complete energy efficiency projects with no upfront cost to the customer.