And Is Your EaaS Partner a Good Fit for You?

If you’ve been pondering the switch to Energy as a Service, or EaaS, for your operation, you’re not alone. The prospect of increased energy resiliency, lower energy costs, and a reduced carbon footprint is driving big demand for this energy model, with market researchers predicting that the global market will more than double by 2030. (Still muddy on exactly what EaaS is and how it drives these benefits? Check out this article.)

Our EaaS team at Caterpillar has implemented solutions for all types of operations: from K-12 schools and grocery stores to industrial facilities. The concept — you purchase energy outcomes and turn ownership and upkeep of energy assets over to a third party — works for many organizations. How do you know if yours is one of them?

Four questions to determine your EaaS fit

When we’re working with a potential customer, we ask a lot of questions to determine if it’s truly beneficial for the operation to transition from a traditional energy model to Energy as a Service. Here are four to start with:

1.     What are your energy-related goals?

Most of the organizations we end up working with share similar objectives. They want to lower their overall energy costs. They want to have confidence in the resiliency of their power supply, even in challenging conditions like extreme weather events or in remote locations. They want to reduce their carbon footprint. Are any — or all — of these goals at the top of your priority list?

2.     What’s your core strength?

Here’s something else many of our EaaS clients have in common. They realize there are opportunities to reach their energy goals, but they also understand they don’t have the expertise in-house to do so. A school district, for example, wants to allocate resources (human and financial) toward serving students, parents, and teachers. Trying to understand energy markets and prices, identify the right combination of energy assets, and tie them all together into a workable solution isn’t a school district’s core strength. Is it yours?

3.     How long do you plan to stay in your location?

This might seem like a strange question, but it matters in the Energy as a Service world. EaaS contracts typically are quite lengthy — some can extend to 10 or even 20 years. Are you sure your operation will remain in its location and have ongoing energy needs there for at least a decade? This is important because there is a cost to install the physical systems. These costs are spread over the life of the assets. A customer with a short-term need will instead usually leverage a rental solution.

4.     What’s the regulatory environment in your area?

Energy policies and regulatory frameworks differ from state to state, province to province, and country to country. It’s important to know what’s allowed and what’s possible in your location. In some places, implementing an EaaS solution may not be feasible, or it may take more time and effort than you’re willing to expend. Good news. We can help you understand the regulations in your area. Just get in touch with one of our experts.

Three factors to look for in an EaaS provider

If the answers to these questions give you confidence that Energy as a Service could be a fit for your organization, the next step is finding an EaaS provider you can trust. Where to start? Consider these factors as you’re narrowing down your provider list:

1.     A strong reputation

Remember that the length of a typical EaaS contract is 10 years or more. That means you need a provider who can operate and maintain energy assets for you for the long haul. Make sure any EaaS providers you’re considering have the financial strength and stability to remain viable. Do you feel certain they’ll still be around in a decade or two? Also, do they have the support network in place to deal with maintenance or repair issues, especially unexpected ones? You want to work with a company that has a deep bench of local, highly skilled technicians.

2.     The ability to “future-proof” assets and technology

Speaking of a decade or two, what will energy assets look like in the 2030s and 2040s? What fuel sources will they run on? What new technologies will improve reliability and reduce emissions? You don’t want the assets your operation relies on to become obsolete. Find out if your EaaS provider is prepared to evolve solutions to fit your future needs. Are they capable of making modifications to assets as new fuel sources — specifically hydrogen — and other technologies become available?

3.     A broad portfolio of solutions

There’s not a one-size-fits-all EaaS solution. Or there shouldn’t be, anyway. If your EaaS provider is trying to sell you one specific product, technology, or fuel source, it may be time to think twice. Instead, look for a company that offers a wide array of energy solutions — generators, solar panels, energy storage, and the technologies that optimize them for your operation — and is willing to customize a solution based on your needs and goals. The ability to scale up (or down) as your operation changes matters too.

A Google search of “global Energy as a Service providers” turns up more than 260 million results. Among them? The Caterpillar EaaS team. We hope you’ll put us on your short list and hold us up to the high standards described above. We’re confident we can deliver an EaaS solution that addresses your needs, today and tomorrow. Reach out to us to learn more.