How long are EaaS contracts?

Typically 10–25 years, matched to the economic life of the asset. Shorter terms (5–10 years) are possible for smaller installs but reduce the unit-rate discount.

Yes — break clauses are standard. The cost depends on the residual value of the asset and outstanding finance, both modelled openly at signing.

What happens at end of term?

Three options are usually defined upfront: provider removes the asset and restores the site; contract extends at a re-negotiated rate; or the asset transfers to the customer (sometimes at a nominal sum). Specified at signing, not negotiated under pressure later.

Is EaaS off-balance-sheet?

Typically yes, but depends on contract structure under IFRS 16 (or your applicable standard). We structure contracts deliberately to achieve operating-expense treatment, and confirm with your auditor before signing.

How much cheaper is the unit rate?

Most EaaS contracts price 15–35% below current grid import for the bundled energy delivered by the on-site asset. The exact discount depends on site, asset mix and contract length.

What about take-or-pay?

Strong EaaS contracts size minimum volumes to your historical consumption with safety margin. We negotiate take-or-pay to a fallback position, not a default obligation.

You. Live performance, consumption and emissions data are contractual deliverables. We never gate your own energy data behind a paywall.

What if my site lease ends mid-contract?

Two protections: lease-aligned contract terms (matching your tenure), or assignment rights (the EaaS contract transfers to the next occupant). Both are negotiated at signing.

Who handles compliance and certification?

The provider. MCS, G99, insurance, ongoing reporting and lifecycle compliance all sit with us as part of the service.

Large commercial rooftop solar array spanning an industrial building

Solution · Energy-as-a-Service

Energy-as-a-Service — zero CAPEX, fixed unit rate, day-one savings.

A practical guide for CFOs and Energy Directors weighing whether to own energy assets or buy the energy as a service from a third party.

£0

Capital outlay

Month 1

Savings from

10–25 yrs

Contract term

In short

Energy-as-a-Service (EaaS) is a long-term contract under which a third party designs, funds, owns, builds and operates your on-site energy assets — and you pay only for the energy delivered, at a fixed unit rate below your current grid tariff. No CAPEX, no asset on your balance sheet, no O&M overhead, and savings from month one. The trade-off: you don't own the asset at end of term unless the contract is structured that way.

Jump to what matters to you:CFO → Balance sheet & terms Energy Director → Unit rate maths Operations → What changes day-to-day

Definition

What Energy-as-a-Service actually is

It is

A long-term (typically 10–25 year) contract in which a provider invests in on-site solar, storage and/or EV infrastructure on your site at zero capital outlay to you, and sells you the resulting energy at a fixed, indexed unit rate that is lower than your current grid import cost.

It is not

A leasing arrangement or hire-purchase. EaaS providers retain ownership for the contract term. You pay per kWh delivered, not per asset. It is also not a Power Purchase Agreement (PPA) — though PPA is one component within an EaaS contract.

Unit rate: The fixed price per kWh you pay for energy delivered by the on-site asset. Typically indexed to CPI or RPI to manage long-term inflation.
Off-balance-sheet: An asset and liability structure where ownership sits with the provider, keeping the asset (and any debt) off the customer's books. Operating-expense treatment under IFRS 16 depends on contract structure.
End-of-term handover: What happens to the asset at the end of the contract. Three common models: provider removes, provider extends, or asset transfers to customer (sometimes at a nominal sum).
Take-or-pay: A clause requiring the customer to pay for a minimum volume of energy whether consumed or not. Strong EaaS contracts minimise or eliminate this.
Performance guarantee: Provider commitment to deliver a contracted volume of energy. Shortfalls trigger compensation. Aligns provider incentives with customer outcomes.

For the CFO

Commercial impact

EaaS exists because three things block most commercial energy projects: capital, complexity and risk. EaaS removes all three. The CFO conversation is no longer 'should we deploy capital into energy?' — it's 'should we sign a long-term contract for cheaper energy?'

01
Zero capital outlay — capital that would otherwise be deployed into energy assets remains available for core business investment.
02
Off-balance-sheet treatment available — operating expense rather than asset and depreciation (subject to contract structure and IFRS 16 assessment).
03
Fixed unit rate typically 15–35% below current grid import, indexed at CPI or RPI to manage long-term inflation.

For operations

Operational impact

Operationally, EaaS is the lightest-touch energy upgrade available. You don't operate the asset, you don't maintain it, you don't insure it. You receive energy at a fixed unit rate and a monthly statement.

01
No O&M obligation — the provider monitors, maintains and replaces components for the full contract term.
02
Insurance and warranties sit with the provider, not the customer.
03
Live performance data is provided as a contractual deliverable — no separate monitoring contract required.

The honest list

Risks — and how we de-risk them

Risk 01

Long contract term locks you in

Contracts include defined exit and break clauses. We model break-clause economics openly before commitment, so 'what happens if we exit at year 10' is a known number, not a surprise.

Risk 02

Unit rate rises faster than grid

Index mechanism (CPI/RPI) is contractually defined and capped. Grid has no such cap. Modelled side-by-side at signing under multiple inflation scenarios.

Risk 03

Take-or-pay leaves you paying for unused energy

Minimum-volume clauses are negotiated to your historical consumption with safety margin. Strong EaaS contracts make take-or-pay a fallback, not a default.

Risk 04

Provider goes out of business

Contracts include step-in rights for funders / replacement operators. The physical asset and revenue stream remain; only the operator changes.

Risk 05

Site lease ends before EaaS contract

Lease-aligned contract terms; or assignment rights so the EaaS contract transfers to the new occupant.

Risk 06

End-of-term: asset removed, leaving capability gap

End-of-term options (extension, transfer to customer at agreed valuation, removal) are defined at signing. No surprises in year 25.

Funding

How it gets paid for

Four ways to fund the same physical asset. Pick the one that matches your balance sheet and your time horizon.

Option 01

Energy-as-a-Service (EaaS)

Capital outlay

Zero

Asset ownership

Provider for term; configurable end-of-term

Best when

Want savings without capital, long tenure, prefer opex treatment.

Option 02

Power Purchase Agreement (PPA)

Capital outlay

Zero

Asset ownership

Provider

Best when

Want fixed kWh price below grid for one asset type (typically solar), simpler structure.

Option 03

Asset Finance

Capital outlay

Deposit + monthly

Asset ownership

You at term end

Best when

Want eventual ownership, finance rate beats projected savings.

Option 04

CAPEX (outright purchase)

Capital outlay

100% upfront

Asset ownership

You

Best when

Cash-rich, want maximum lifetime IRR, have in-house resource to operate.

CapEx vs EaaS — illustrative 100 kWp rooftop solar

One delivers in year 4. The other delivers in month one.

Cumulative cash position over 15 years for a typical UK commercial 100 kWp solar install. Hover the chart for the year-by-year breakdown. Figures are illustrative, based on published benchmarks — not a quote.

CAPEX (own the asset)

EaaS (buy the energy)

Assumptions

100 kWp rooftop PV · 95,000 kWh year 1
CAPEX install: £85,000 turnkey
Grid import £0.28/kWh, +4%/yr
EaaS rate £0.21/kWh, CPI +2.5%/yr
80% self-consumed · 0.5% panel degradation
O&M £1,200/yr · inverter swap Y12

Hover the chart to see each year.

Edwards Vacuum manufacturing facility with rooftop solar

Compared

How this stacks up against the alternatives

	EaaS	PPA	CAPEX	Asset Finance
Capital required	Zero	Zero	Full	Deposit + monthly
Balance sheet impact	Off (typically)	Off (typically)	On — asset + dep'n	Depends on lease type
You own the asset?	No (configurable)	No	Yes	Yes at term end
Day-one savings	Yes	Yes	After payback	Net of finance cost
O&M responsibility	Provider	Provider	You	You
Lifetime savings	Good	Good	Highest	Strong
Performance risk	Provider	Provider	You	You

EaaS is not always the right structure — but for any business without internal energy expertise, without surplus capital, or with a strong preference for operating expense, it is the cleanest route from problem to outcome. The right contract is one you understand line by line at signing.

Common questions