Energy Infrastructure as a Service

Energy-intensive companies often find investing in critical energy infrastructure projects a cost-prohibitive, drawn-out undertaking.

Whether you’re replacing end-of-life equipment, retrofitting buildings, or expanding your operations, addressing efficiency – as well as ongoing utility and maintenance expenses – poses a challenge in that:

• The expense can drain available capital 
• The entity may lack tax appetite to realize all benefits
• The business doesn’t have energy infrastructure expertise

In this article, we’ll look at Infrastructure-as-a-Service (IaaS), financing solutions to pay for energy infrastructure, and how working with an As-a-Service partner can accelerate both cost efficiencies and innovation.

What Is Energy as a Service (EaaS)?

EaaS allows businesses to implement energy-efficient solutions without the capital outlay that traditionally accompanies these projects. Instead of bearing the costs themselves, companies partner with Energy-as-a-Service providers to outsource the design, installation, maintenance, and operation of energy systems. 

The approach includes flexible Energy Service Agreements and industry-specific solutions that can benefit companies in a range of sectors, including health care, industrial manufacturing, hospitality, stadiums, distribution and cold storage facilities, and more. Through an expert-led energy audit, providers assess current energy usage and identify opportunities for efficiency improvements. Once an energy plan is tailored to a company’s specific needs, financing options are discussed, enabling energy-saving upgrades without draining internal resources.

While EaaS is largely focused on efficiency, IaaS is distinct in its offering of a longer payback on larger equipment investments.

What Is Infrastructure-as-a-Service (IaaS)?

IaaS is focused on providing third-party capital for non-core investments. Especially for businesses aiming to optimize their energy infrastructure while preserving capital for growth, this model offers significant financial and operational benefits.

This approach is intended to transfer risk, replace end-of-useful-life equipment, and solve deferred maintenance budget shortfalls. With IaaS, companies can implement heavy infrastructure such as chillers, boilers, and central utility plants without depleting capital.

What Are Examples of Energy Infrastructure?

Companies that choose IaaS to address energy infrastructure needs benefit the most when implementing large-scale solutions. However, a professional energy audit will produce a comprehensive view and provide insights into every unit of energy – from lighting to complex infrastructure. 

Common energy infrastructure projects include:

• Central chiller plants
• Boilers and chillers
• Data management
• HVAC equipment
• Optimized furnaces
• Connected technologies
• On-site power generation plants (fuel cells and CHP)
• Water management and recovery
• Fire suppression/security systems

Addressing Capital Expenditure (CapEx) Challenges

Historically, businesses needed hefty upfront capital expenditure (CapEx) to implement and maintain energy infrastructure. These financial hurdles often cause companies to delay or forgo necessary upgrades, despite the long-term savings available. 

Plus, the ongoing burden of keeping aging equipment up and running often produces large deferred maintenance backlogs – leaving little room for other growth-related investments. 

EaaS and energy infrastructure financing shifts this dynamic by transforming CapEx into operational expenditure (OpEx). 

Instead of making massive, one-time investments, businesses pay for the service through ongoing operational expenses or by leveraging companies like IonicBlue that invest in infrastructure assets and provide operating performance guarantees. This not only frees up capital for other business initiatives but also creates a predictable cost structure, eliminating the risks of rapid utility cost increases, unexpected maintenance costs, or expenses due to system failures.

Alleviating Internal Resource Constraints

Managing energy infrastructure in-house can place an immense strain on internal resources. Most companies lack the expertise and dedicated personnel to efficiently manage complex energy systems, often resulting in inefficiencies, higher costs, and the diversion of key staff away from core business activities.

By outsourcing energy management through EaaS and IaaS, businesses gain access to the expertise of dedicated energy professionals. These providers handle everything from initial energy audits to system design, implementation, and ongoing maintenance. This alleviates the pressure on internal teams and shifts risk.

Outsourcing to experts introduces solutions and energy infrastructure tailored to meet your company’s specific needs while providing continuous monitoring and support. This ensures optimal system performance and reduces the risk of costly downtime. In addition, companies can net:

• An increase in EBITDA and valuation
• Guaranteed energy savings
• Accelerated automation
• Progress on sustainability goals
• Reduced carbon emissions
• Tailored finance structures

Long-Term Benefits of EaaS

Energy infrastructure financing and EaaS solve a company’s short- and long-term goals – by optimizing equipment lifecycle management, leveling out utility expenses, and paving the way for efficiency and sustainability.

By upgrading to more efficient energy systems, businesses can reduce their carbon footprints without depleting capital.

EaaS also provides risk mitigation and operational resilience. Backup power solutions, for example, ensure business continuity in case of grid outages, reducing the risk of costly downtime. This is particularly critical for industries where even short interruptions can lead to significant financial losses.

From a financial perspective, EaaS allows companies to accelerate long-term plans that might otherwise be delayed due to CapEx constraints. By outsourcing energy infrastructure management, businesses can fast-track energy upgrades and begin realizing the benefits of lower energy costs, improved efficiency, and reduced environmental impact.

The importance of energy management has never been more evident, particularly as global investment in clean energy surges. According to BloombergNEF’s Energy Transition Investment Trends 2024, global investment in the low-carbon energy transition hit a record $1.77 trillion in 2023 – a 17% increase from the previous year. This growth, despite global challenges like inflation and geopolitical turbulence, underscores the rising demand for cleaner, more efficient energy solutions.

Electrified transport, which includes electric vehicles and associated infrastructure, now leads energy transition investments, reaching $634 billion in 2023, a 36% increase.

As companies aim to stay competitive and align with global sustainability goals, they must consider how these trends impact their operations. Energy-Infrastructure-as-a-Service offers a direct pathway for businesses to participate in this transition without requiring massive upfront investments – aligning with broader market shifts toward, for example, renewable energy and electrified transport.

Selecting the right partner for your energy infrastructure portfolio is key. IonicBlue specializes in end-to-end EaaS solutions and offers long-term capital investments of 10 to 20 years alongside performance guarantees. We offer no-cost consultations to help you assess your needs and address energy challenges without tying up capital. Our experienced team offers expert solutions and flexible financial structures alongside turn-key service. Connect with us today to get started!