Kaer Pte Ltd, the Singapore-based Air Conditioning as a Service (ACaaS) provider, has released a paper documenting the fundamentals and benefits of the different business models that are available in the air conditioning sector.
With the current interest and move towards the ‘circular economy,’ and how it impacts the formerly conservative air conditioning sector, the paper discusses the strengths and weaknesses of the different air con provision models that are available, as well as the rise of the circular economy business model known as Air Conditioning as a Service (ACaaS).
Commenting on the impact of circular economy thinking on the air conditioning sector, Justin Taylor, CEO of Kaer, said: “ACaaS allows building owners, developers and users to outsource responsibility for their air con climate. Today we all subscribe to services like music, TV shows, entertainment and transport, and pay only for what we use. Why should air conditioning be any different? Our customers buy air conditioning from us by paying a fixed single rate for how much they have consumed. They do not have to pay for the capital cost of the plant, monitoring, repairs, maintenance, electricity and all other costs associated with the chiller plant system. We take the responsibility of buying and operating the plant, and reducing energy consumption from building owners. We take on all future costs related to operations and maintenance.”
ACaaS is becoming the norm with more than 10 such sites in Singapore. Under this model, developers and building owners outsource the ownership and operations of their air con system. Kaer designs, installs, finances, owns, monitors and operates the system within the building. Users only need to pay a single rate applied to the consumption of chilled water on a monthly basis. They do not have to pay for repairs, maintenance, electricity and all other costs associated with the system.
ACaaS was first seen in 2013 and is an example of the familiar concept of servitisation. Rolls Royce famously no longer supplies jet engines but provides airline operators with ‘power by the hour’ – a phrase it coined over 50 years ago. This is a win-win business model. Building owners can reduce their electricity costs and concentrate on their core business activities.
Besides helping building owners reduce capital expenditure and recurring maintenance costs, Kaer also undertake the responsibility of monitoring and controlling the indoor climate to maximise energy efficiency of the buildings, thus ensuring that the air con system is green and environmentally sustainable.
The paper is available to download at: www.kaer.com/news.