In a warming world with increasing urbanization and a growing energy demand for air conditioning, Cooling as a Service is set to be a solution to scale up efficient and clean cooling systems in buildings.

The World Green Building Council (WorldGBC) and The Basel Agency for Sustainable Energy (BASE) have joined forces to mainstream the Cooling as a Service (CaaS) business model around Latin America.

CaaS is an initiative lead by BASE along with the Kigali Cooling Efficiency Program (K-CEP) that overcomes key market and financial barriers to increase and accelerate the adoption of energy-efficient cooling technologies and the use of climate-friendly refrigerants gases.

There are currently 1.6 billion air conditioning units on the market, and every second 10 brand new electricity-consuming air conditioners are plugged in around the world. Cooling represents one fifth of the total electricity consumed in buildings today – or 10% of all global electricity consumption – and demand is expected to triple by 2050. In many regions, cooling is not only a comfort but also a mean of survival with air conditioning and refrigeration necessary for habitable living conditions, food security and life-saving healthcare. However, conventional cooling both consumes a lot of electricity and relies on refrigerant gases that harm the environment. Even though efficient cooling technologies are available, deployment has been limited by the high upfront cost and the reluctance and distrust on energy savings.

Cooling as a Service (CaaS) is a pay-per-service model for clean cooling systems, which eliminates upfront investment in clean cooling technology for customers who simply pay for the amount of air conditioning they use instead of buying and maintaining the whole equipment, strengthening incentives for efficient consumption. The technology provider remains the owner of the cooling system, maintains it, and covers all operational costs including electricity, which incentivizes to install and maintain the most efficient equipment. CaaS also encourages manufacturers of cooling technology to design for reuse rather than obsolescence, thus supporting the circular economy. BASE is currently supporting its implementation in the Dominican Republic, Jamaica, South Africa, India, and Mexico.

CaaS has showed a big potential to be introduced in buildings, as building owners do not need to invest in the cooling system, nor bare any performance risk and can channel the “pay per unit of cooling” to the tenants to overcome the split incentive. Based on calculations for Mexico, CaaS could help save up to 23% of cooling costs for customers and reduces emissions from electricity use and coolant leakage by up to 49%. 

Thus, WorldGBC as a global network leading the transformation of the built environment to make it healthier and more sustainable has joined the CaaS Alliance to help the transition towards clean and efficient cooling. This alliance aims to support the process of mainstreaming the CaaS business model into the markets and gathers technology providers, investors, building networks and international organizations. The CaaS Alliance creates a collaborative environment between stakeholders active in the market as well as facilitators to spread the word about the model, build capacity, and implement the model in different sectors and regions.

As an outreach partner, WorldGBC will support the mainstreaming of the CaaS model by identifying and facilitating opportunities for pilot projects, organizing workshops on energy efficiency and net zero carbon building, arranging webinars for technical training and supporting the marketing and communications efforts.

WorldBGC and BASE are looking forward to a fruitful collaboration in 2020.

Author: Veronica Corno is a Climate Finance Projects and Communications Officer at the Basel Agency for Sustainable Energy (BASE).