.png)
For decades, commercial buildings and industrial facilities have treated HVAC systems as necessary capital expenditures, big-ticket purchases requiring substantial upfront investments, followed by years of maintenance and operational costs. But the emergence of HVAC-as-a-Service (HVACaaS) and Cooling-as-a-Service (CaaS) is changing this view, offering businesses a way to access climate control solutions without owning the equipment outright.
Much like the transition from software ownership to cloud-based Software-as-a-Service (SaaS), HVACaaS and CaaS shift the financial and operational burden away from businesses and onto service providers. This model allows companies to pay for cooling and heating based on actual usage, efficiency, or delivered performance, rather than making heavy capital investments in HVAC infrastructure.
The question is no longer whether HVACaaS and CaaS make sense, but how soon businesses will fully embrace them and how progressive they will be to use the right go-to-market approach.
Financial and Operational Benefits of HVAC-as-a-Service
No Upfront Capital Investment
Traditionally, HVAC systems come with significant capital expenditures, which can strain budgets and limit financial flexibility. HVACaaS eliminates the need for large upfront investments, allowing businesses to allocate capital to core activities like growth, innovation, or sustainability initiatives. By shifting from CapEx to OpEx, companies can free up resources while still maintaining top-tier climate control solutions.
A great example is Kaer, a Singapore-based pioneer in Cooling-as-a-Service. Since 2013, Kaer has operated a model where they own (thus finance), maintain, and optimize the cooling infrastructure, while customers simply pay for chilled air as they need it, much like a utility. This removes CapEx completely and enables customers to enjoy performance-guaranteed cooling without the operational burden.
👉 Learn more about Kaer’s model here
Lower Energy Costs and Improved Efficiency
One of the standout advantages of HVACaaS and CaaS is their ability to optimize energy efficiency through IoT integration. IoT-enabled HVAC systems collect real-time data on performance, occupancy, and environmental conditions, allowing for dynamic adjustments that reduce energy waste. According to a Schneider Electric report, businesses that integrate smart IoT-driven HVAC solutions can reduce energy consumption by up to 40% while improving equipment lifespan and performance (Schneider Electric Digital Transformation Report, 2024).
A prime example is Grundfos '“Pay-per-Saved-CO2” model, which directly ties financial savings to environmental impact. In one case, an Italian healthcare facility using this model reduced CO2 emissions by 41.23 tons per year, demonstrating both financial and environmental benefits.
Predictable and Reduced Maintenance Costs
With traditional HVAC ownership, unexpected repair costs and system inefficiencies can lead to significant financial uncertainty. HVACaaS providers handle maintenance, repairs, and system upgrades as part of the service package, ensuring predictable costs and maximum uptime. This approach aligns incentives, providers have a vested interest in maintaining peak system performance since they profit from uptime and efficiency rather than selling costly repairs.
For instance, Johnson Controls' IoT-powered HVAC systems leverage predictive analytics to prevent downtime, cutting energy costs by up to 20% while increasing overall operational efficiency. Instead of reactive maintenance, IoT-based monitoring allows for early detection of performance issues, reducing breakdowns and prolonging equipment life.
Flexibility and Scalability
As businesses grow, their cooling and heating needs evolve. Traditional HVAC systems, once installed, have fixed capacities that can be inefficient if demand fluctuates. With HVACaaS and CaaS, businesses can scale their climate control needs dynamically, adding or reducing capacity based on real-time requirements.
Companies like Thermondo and Kelvion are pioneering this approach. Kelvion’s “Heat Exchange-as-a-Service” model uses real-time IoT tracking to adjust usage and optimize cost management, ensuring that businesses only pay for what they use. This level of adaptability makes it ideal for commercial real estate, manufacturing, and data centers where climate demands fluctuate.
The Role of IoT in HVAC-as-a-Service
Data-Driven Decision Making
IoT sensors embedded in HVACaaS and CaaS systems continuously monitor performance, energy use, and environmental conditions. This data allows businesses to make real-time adjustments to optimize energy consumption and cost. The use of cloud-based analytics and AI-driven insights enables predictive maintenance, automatic efficiency adjustments, and demand-based cooling strategies.
A real-world example comes from Kaer, a pioneer of Cooling-as-a-Service in Singapore. Kaer’s platform leverages IoT and AI to provide live data dashboards that track cooling demand, system performance, and energy usage. This data enables customers to make informed decisions about load planning and building management, while allowing Kaer to remotely fine-tune system settings and resolve anomalies before they affect operations.
This kind of transparency and automation not only enhances customer trust—it also reduces costs, improves system reliability, and strengthens the overall value proposition of HVACaaS.
Enhanced Sustainability and Compliance
Governments and industries are increasingly focused on sustainability and carbon footprint reduction. The European Union’s Green Deal, for example, pushes for greater energy efficiency across industries. HVACaaS and CaaS align perfectly with these regulations by ensuring equipment is optimized for minimal environmental impact.
Leading companies like Viessmann and Detandt-Simon have demonstrated this approach with energy-efficient heating and ventilation subscriptions. Detandt-Simon’s Ventilation-as-a-Service (VaaS) model, for instance, has reduced energy use by 40%, showcasing how smart climate solutions contribute to both business profitability and regulatory compliance.
👉 Learn more about V4U model and the role of P2S
A standout example comes from Energy Partners, which implemented a Cooling-as-a-Service model in a South African dairy factory. The system combined high-efficiency ammonia refrigeration with solar integration and predictive maintenance to significantly outperform expectations. The result? Over 40% energy savings, improved reliability, and a major reduction in CO₂ emissions, all delivered without any upfront investment from the customer.
👉 Read the full Energy Partners case study via the SET Alliance
Value-Based Pricing: The Key to Maximizing Economic Impact
Traditional HVAC pricing relies on cost-plus models, where customers pay based on equipment and installation costs. However, value-based pricing, charging customers based on actual business impact, is proving to be a superior approach. Companies offering HVACaaS and CaaS are shifting towards pricing structures based on energy savings, uptime guarantees, and operational efficiency improvements.
This model not only creates stronger alignment between providers and customers, but it also opens the door to higher-margin, recurring revenue streams.
Take Kaer, for example. Their Cooling-as-a-Service model doesn’t charge customers for equipment; it chargesfor chilled air, with pricing linked directly to actual cooling demand and system performance. This removes upfront costs and ties revenue to usage and efficiency, not asset ownership.
Another example comes from the lighting sector, where companies like ETAP and Signify are leading with Lighting-as-a-Service models. In a series of projects across retail and industrial spaces, they implemented performance-based pricing tied to energy reduction guarantees and circular sustainability metrics. In one case, LaaS was offered to DIY mega stores, with pricing based on delivered lux levels and measurable carbon footprint reduction.
👉 See the DIY megastore LaaS example
These models prove that value-based pricing is not just viable, it’s profitable, especially when supported by IoT monitoring, analytics, and well-defined SLAs. For HVACaaS providers, the opportunity lies in shifting the sales message from "buy this unit" to "pay only for performance you can measure and trust."
What’s Next? The Future of HVAC-as-a-Service
As businesses increasingly prioritize efficiency, sustainability, and financial flexibility, HVACaaS and CaaS are poised to become the new standard for commercial and industrial climate control. Companies that embrace these models will gain a competitive edge by reducing costs, enhancing sustainability, and leveraging data-driven insights.
The shift is already happening. Early adopters are seeing lower energy costs, reduced maintenance burdens, and improved operational resilience. As IoT continues to evolve and regulatory pressures mount, HVACaaS and CaaS will transition from an emerging trend to abusiness necessity.
The question is: Will your business adapt now, or wait until competitors are already ahead?
From Vision to Execution: P2S in Action
At P2S, we don’t just advise on HVAC-as-a-Service, we help make it real. We've worked with companies like Detandt-Simon to bring models such as Ventilation-for-You (V4U) to market, delivering guaranteed comfort, energy savings, and recurring value. As active members of the SET Alliance, we are proud to support the broader shift toward XaaS models across HVAC, energy, and smart building sectors.
Ready to turn HVACaaS into a growth engine? Let’s talk.
