The energy revolution has been ruled by business model innovations that provide services to end users, rather than selling them equipment.
Two familiar examples are:
- Software as a Service (SaaS), in which clients purchase a subscription from a central software host for licensed use.
- Solar Power Purchase Agreements (solar PPAs), in which clients purchase solar power at a set price from a solar power provider.
The Efficiency as a Service (EaaS) and Renewables as a Service (RaaS) business models are an evolution of the SaaS and PPA models.
The EaaS business model delivers commercial building owners and property managers:
-Immediate net operating income (NOI)
-Cash flow boost enabled by calculated future energy savings and reduced operating expenses.
-Access to the latest advanced energy technologies
-Optimized performance that service providers both monitor and manage.
This model reduces the risk of ownership because service providers own and monitor equipment to deliver optimized performance. The risks of owning equipment shifts from commercial building customers to service providers.
The RaaS Combines EaaS & Renewable Energy
The RaaS model includes:
RaaS enables customers to combine their typical energy efficiency improvements with renewables in order to maximize energy savings and energy production.
We now do not necessarily require a 20-year commitment as was formally standard among PPAs. We can often shorten that period to 10 years.
From the RaaS perspective, a "saved" kWh is identical to a "produced" kWh. Energy Advisors has developed an innovative deal structure in which to combine "saved" and "produced" kWhs in one project.
The customer now can maximize their savings and production of kWh, while still taking full advantage of available investment tax credits and current aggressive depreciation allowances.
In addition, we incorporate cost segregation on equipment to be replaced to further increase depreciation allowances.