Demand for energy subscription offerings is on the rise

Besides offering good deals to both customers and providers, Energy-as-a-Service business models have the potential to boost the green energy transition. That is according to insights from Metyis.

Energy is a major part of peoples’ lives and of local economies. But going forward, the electricity sector faces huge challenges as pressure mounts for a green transition – and energy remains a focal point for the shift to sustainable technologies and renewables.

This transition to sustainability is still at an early stage, but subscription energy models can help to expedite it, according to Metyis, a European management and data firm. As new sustainable energy sources become more widely available, consumers are more likely to demand them – and more options for consumers will translate to a more sustainable grid.

So what is Energy-as-a-Service? Put simply, it is a system in which energy customers receive energy services as part of a lease agreement. Instead of owning the infrastructure, it is leased from an energy company and the customer simply pays a periodic fee to use it.

For example, if a consumer wants solar energy at their home, instead of buying the solar panels and paying for installation, they can simply pay a monthly fee and a provider will cover all maintenance services.

Or in the case of electric vehicles, companies provide a lease for a vehicle that includes all expenses, including insurance, maintenance, and charging. It is like leasing a car, with the added benefit that the company installs a home charging system.

The same type of offers exist for things like home batteries used to store energy (which can help lower electric bills and cover usage needs during power outages), or air conditioning and hot water appliances, though this market is still in an early stage of development.

“These models provide greater convenience, transparency, and cost savings,” said Francisco Ruiz, partner and the head of energy and utilities at Metyis.

“It helps customers avoid surprises in their bills, simplifies the contract and payment procedures, and allows them to adjust the service to fit their changing needs. Additionally, customers gain access to higher quality, more efficient, and sustainable energy products and services.”

For energy suppliers, Energy-as-a-Service can also be a sweet deal: It can help to boost customer loyalty and profitability while helping companies stand out from the competition. It can help energy companies position themselves as guides for consumers in their electrification journeys.

There are several factors driving excitement and investment in Energy-as-a-Service: the wide range of subscription-based energy services, the fact that it can be a more affordable solution, and the convenience that it can offer energy customers.

“Energy subscription business models present a promising opportunity for the sector to leverage its transition and digitalization,” said Ruiz.

“These data-driven models offer more innovative, attractive, and sustainable energy services and products for customers as well as a competitive edge for companies to engage, differentiate, and monetize their offerings.”

With energy increasingly produced and consumed in local, decentralized markets, the trend towards Energy-as-a-Service will pick up steam, resembling the developments seen in other markets like software, retail, and others. “Though we are still in the early stages of this transition, subscription energy models are expediting it,” concluded Ruiz.