Servitisation for Energy Transition and Circular Economy: Learnings from the CaaS and EaaS Business Cases

35% of Green house Gases (GhG) savings to meet the Paris climate targets can be achieved through energy efficiency. Unfortunately, strong demand market barriers slow down market adaptation of energy efficient solutions. Servitisation, or the business model of paying for a service received instead of purchasing the asset, represents a strong solution to accelerate the implementation of higher energy efficient solutions, while also fostering a circular economy mindset and therefore reducing the economy’s dependence and consumption of raw materials. Several companies across the globe have started implementing the model, and results are promising. Customers benefit from instantaneous energy consumption reductions while providers gain control to accelerate the implementation of innovative climate resilient technologies on the markets. Nonetheless, implementing servitisation in business operations is complex; it requires a shift in company revenue models, a much more active on the ground presence, digital solutions, reliable measurements, state of the art maintenance and repairs, and optimised supply chains, while also requiring for solution providers to develop the right financing mechanism to fund the implementation of the solutions and their operations. Implementing servitisation differs considerably from the classic sales business models. However, beyond these challenges, removing the upfront investment requirement and all perceived risks of operations from the customer’s table is a highly competitive selling argument to convince clients to engage with climate resilient solutions.