Cooling as a Service (CaaS)

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Overview
Cooling as a Service (CaaS) aims to decrease energy consumption and potent HFC emissions from cooling systems by increasing competitiveness of state-of-the-art technologies. The model uses an innovative pay-per-service model, with integrated financial tools to recapitalize technology providers who own, maintain and operate the equipment, thus aligning incentives to support climate change mitigation and circular economy.

The Problem
Current cooling technologies rely on HFC gases, thousands of times more potent than CO2 in causing global warming. Improving the energy efficiency of cooling systems presents a significant opportunity to reduce energy use and associated GHG emissions in buildings and supply chains (potential to halve the 2070 MtCO2 yearly emissions associated with AC projected by 2050 according to the IEA), while delivering other benefits including cost savings, improved air quality, services, comfort and increased productivity.

The Solution
Cooling as a Service supports the phase-down of HFCs and reduction of energy consumption of cooling systems globally by improving the financing for and thus application of clean, efficient cooling solutions through an innovative pay-per-service model. Customers pay per-unit of cooling, while technology providers own equipment, maintain it, and pay electricity, incentivizing efficient cooling technology, maintenance practices, and the design of equipment that is modular, with parts being reusable/recyclable since the ownership of the equipment remains in their hands. The model includes a ‘sale-and-leaseback’ scheme which can drive financial institution capital at scale, as well as a payment guarantee mechanism that mitigates risk to the technology provider.

Target Impact
The proponents, BASE and K-CEP, estimate that there is a market opportunity of $17-50 billion per year from present to 2050 if the model can be implemented for 10% of the global AC market. They also estimate that this will result in 30-60% energy efficiency improvement, and a dramatic decrease in high global warming potential coolants (e.g., HFCs).