ESCOs Can Shoulder the Capital Costs of Decarbonization

The World Business Council for Sustainable Development (WBCSD) has promoted Heat as a Service (HaaS) as the next logical step after decarbonizing electricity supply for companies pursuing emissions reduction targets. HaaS is a potential option for companies with decarbonization targets. Rather than investing directly in a new renewable heat solution, companies can turn to a third party to bear the capital costs and guarantee its performance over the lifetime of the contract. This provides an opportunity for companies to decouple capital allocation from their decarbonization journey, free up capital for core business investments, and benefit from immediate operational cost savings. HaaS solutions might not appear on the company’s balance sheet, which can be a critical consideration for companies keen to keep leverage ratios low.