3Q 2020

Energy as a Service for Higher Education

Energy as a service (EaaS) continues to be top of mind for energy service companies, utilities, startups, and private equity firms. The market opportunity for EaaS is especially strong among higher education institutions that have significant deferred maintenance backlogs and aggressive sustainability goals as they struggle with budget shortfalls. In addition, the financial impacts of COVID-19 on higher education institutions are accelerating opportunities for EaaS in this segment.

Vendors should pursue smaller contracts oriented at immediate ROI and cash flow to take advantage of this market opportunity, or they might face stiff competition as the market matures. EaaS is a highly differentiated financing mechanism compared with energy service performance contracts (ESPCs), public-private partnerships (P3s), design build, and other project delivery mechanisms. However, EaaS remains relatively unknown and poorly understood among prospective higher education customers. Vendors can use this opportunity to educate clients on EaaS and demonstrate the potential of this project financing mechanism through targeted engagements.

This Guidehouse Insights report analyzes the EaaS market within the higher education segment. The report covers the evolution of EaaS definitions, drivers, and barriers in this market and offers recommendations to vendors pursuing growth in this segment. The report provides a deep dive into the differentiators of EaaS agreements, sustainability goals in higher education, recent case studies, and approaches vendors can employ to gain and grow market share in this nascent market.

Pages 17
Tables | Charts | Figures 4
  • What is energy as a service?
  • How has the definition of energy as a service evolved in the past year?
  • What are the drivers for energy as a service among higher education clients?
  • How do higher education clients define sustainability?
  • What is important to higher education customers when considering energy as a service?
  • How is COVID-19 affecting projects?
  • What are the barriers in this market?
  • How can vendors capture this market opportunity?
  • Energy service companies (ESCOs)
  • Efficiency as a service companies
  • Private equity firms
  • Utilities
  • Investor community




The Definition of Energy as a Service Has Evolved

Vendors Should Exercise Caution When Using Public-Private Partnership Language to Describe EaaS

Sustainability Goals Drive the Higher Education Market

Large Deals Demonstrate Potential

Sustainability Is a Priority for Students and Administration

Outsourcing Alleviates Mission Creep and Helps Meet Goals

EaaS Is a Pathway to Address Deferred Maintenance

Student Involvement and Research Is in Focus

Shrinking Budgets Due to COVID-19 Mean Opportunity for Vendors

The COVID-19 Pandemic Hit All Sources of Funding

The Crisis’ Impacts on Sustainability Projects

Vendors Should Focus on Customer Education

Vendors Should Focus on Innovative Institutions That Have Partnered with the Private Sector

Vendors Need to Create Channels to Cabinet-Level Stakeholders

PPAs Can Segue into EaaS Conversations

Vendors Should Pitch Contracts That Deliver Quick Returns

Getting the Right Stakeholders in the Room Is Essential

Vendors Should Educate on Control of Assets and Employee Transfer

  • EaaS Deal Structure
  • Scope of Sustainability in Higher Education
  • Guidehouse Insights’ Recommendations for EaaS Vendors
  • Common Features of EaaS Agreements
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