Energy-efficiency-as-a-service (EEaaS) is a relatively new offering. It tasks a third party with financing and performing the required upgrades to make buildings more efficient. Then, once customers realize the resulting savings, they use the money to pay the provider back for those upgrades.  

According to Guidehouse Insights, the EEaaS market value will hit $278 billion by 2028. There are several likely reasons for this growth. For starters, professionals such as facilities managers continually look for practical ways to achieve upgrades. Similarly, corporate decision-makers want to show stakeholders they care about and are committed to eco-friendly improvements.

EEaaS also supports the ongoing smart cities trend. As reported by Revolutionized, city officials in Singapore want to build 42,000 smart homes that use solar panels to lower indoor temperatures. Since the energy-efficiency-as-a-service model relies on collecting data to make smarter decisions, it could show city planners which green climate control methods are most effective for curbing costs and keeping people comfortable.

However, people understandably wonder how the growing interest in energy-efficiency-as-a-service could affect heating, ventilation, and air conditioning (HVAC) contractors. Here’s a closer look at the possibilities.

It May Mean They Focus Almost Exclusively on Residential Customers

The EEaaS market is still evolving, so it’s anyone’s guess what it might look like in several years. For now, most companies in the space focus on private and public businesses and organizations rather than homeowners or renters.

For example, Johnson Controls provides EEaaS services to clients in the health care and manufacturing sectors. It has also invested in Carbon Lighthouse, which according to the Motley Fool, aims to remove 20% of emissions from non-residential buildings with various energy-efficient upgrades. There’s also Allumia, an EEaaS provider for small businesses that tackles projects ranging from $35,000 to $10 million.

Thus, HVAC contractors may find it most worth their time and money to focus primarily on residential customers. Indeed, some home-based utility clients use dashboards that track their energy usage over time.

However, many of those parties would likely not find it appealing or necessary to enter into an EEaaS contract now. Plus, if a person rents a property, their lease agreement probably doesn’t allow for making substantial changes, even if those upgrades eventually provide massive payoffs.

It May Mean They Double Down on Loyalty and Familiarity

Many of the companies offering EEaaS are new. People often hesitate to make changes and try unfamiliar things. Even if a well-established business provides energy-efficiency-as-a-service under its umbrella of offerings, many customers may feel unsure if the model would give them the benefits that matter most to them.

Plus, they may balk at the idea of paying back for energy-efficient upgrades over time. After all, it’s still standard to get periodic bills that people pay relatively soon after they arrive.

These realities illustrate why HVAC contractors may find they can keep their customers and attract new ones by offering a proven business model that does not require a new way of paying for energy needs. Statistics show that companies with successful loyalty programs get half their leads from technicians who secure new business existing customers.

Even people who find the energy-efficiency-as-a-service model intriguing will not all be among the early adopters. HVAC contractors can capitalize on the market changes by assuring customers they’ll keep providing something familiar, even as new energy access models arrive.

It May Benefit Well-Established Contractors in Smaller Towns

When a climate-control system malfunctions, HVAC contractors are typically the first on the scene to suggest what customers should do next. For example, if an air conditioning unit is more than a decade old, replacing it may be more appropriate than repairing it. Similarly, if an HVAC contractor addresses issues with increasing frequency, a replacement could bring more cost-effectiveness than numerous repairs.

EEaaS costs usually include maintenance and repairs. However, if a person lives in a small town or a rural area, it may be more difficult for someone associated with an EEaaS company to reach them as promptly as a local provider could.

There are ongoing efforts to help business owners in small towns improve their energy efficiency. In 2019, there were nearly 650 applicants received grants from the U.S. Department of Agriculture. Those awards could be used to determine current usage for renewable energy upgrades and audits. That’s an example of how people are increasingly concerned about ensuring energy improvements reach rural areas, too.

It’s infeasible to expect all energy-efficiency-as-a-service providers will immediately have the resources to cater to people in less populated areas as readily as major cities. However, contractors could find themselves able to fill the gaps.

It May Provide an Additional Source of Income for Contractors

The world’s desire for cleaner, more efficient energy is causing a job-creation boom. According to the American Council for an Energy-Efficient Economy, one recent U.S. report found that President Biden’s proposed energy-saving investments could bring 400,000 new jobs for several years. Some engineers and electricians have expanded their skills to match the rising demand for solar power.

Similarly, HVAC contractors may be trained to install the sensors and other tech used for EEaaS customers. That could create another income stream.

A good starting point could be working part time for an EEaaS company. From there, if things go well, an HVAC contractor who also owns a company might decide to create a new EEaaS business arm.

Before doing that, it’s useful for them to gather case studies to illustrate how energy efficiency as a service could help. In one recent example, the YMCA of Southwest Kansas reduced its usage by approximately 30% through the EEaaS model.

A representative from the organization also noted that it would have taken 10-12 years to accomplish the energy-saving measures implemented by the chosen energy-efficiency-as-a-service provider. The upgrades ranged from installing variable frequency drivers on six HVAC units to replacing and retrofitting several light fixtures in favor of more-efficient options.

A Prime Opportunity for Preparedness

It’s too early to know whether and how much the EEaaS market may impact HVAC contractors. However, preparing for potential future impacts will make these professionals more resilient and encourage them to assess how energy-efficiency-as-a-service might alter how they operate and advertise to customers.