For the past six years, Sean-Paul Ferrera has relied on an energy-as-a-service provider to help manage energy consumption at his six Dunkin' restaurants in the San Antonio, Texas, area.

The arrangement has helped him limit rising energy costs, improve building controls and maintain more consistent temperatures, Ferrera said. At one restaurant, a new HVAC system has even helped keep doughnuts fresher throughout the day.

Ferrera initially enrolled one restaurant in the EaaS program offered by energy-service company Budderfly before expanding the arrangement to all six locations.

"I didn't even know energy-as-a-service was an option," Ferrera said in an interview.

The model is gaining traction among smaller businesses like Ferrera’s as well as larger institutional building operators. Many of them see it as a way to modernize aging infrastructure without diverting capital from core operations.

At Beacon Health System, a nonprofit healthcare organization serving Indiana and Michigan, a 30-year agreement with EaaS company Enfra is helping the organization accelerate energy efficiency improvements at its two largest hospital campuses, according to Beacon.  

Another healthcare organization, Baptist Health, has also entered a 30-year EaaS partnership with Enfra.

Steve Scannell, Baptist Health's chief investment officer, said in an emailed statement that the arrangement enables the health system to draw on expertise it would be difficult to develop internally and lets Baptist Health focus more on patient care while Enfra focuses on energy cost savings.

The arrangements reflect a growing interest in the EaaS model, in which outside providers finance and manage energy-related improvements in exchange for payments over the contract term.

Reducing costs

For Beacon Health, major factors behind its decision to pursue EaaS were rising energy costs, deferred maintenance and limited capital availability, according to the company. 

Brian Spencer, vice president of facilities, construction and real estate at Beacon Health, said nonprofit healthcare organizations operate with narrow margins, making it difficult to secure funding for major infrastructure improvements.

"The fundamental reason we considered going down the path was to go faster in achieving some of our energy efficiency objectives and our maintenance quality objectives," Spencer said in an interview.

Beacon evaluated several alternatives, including purchasing and maintaining the equipment itself, conventional financing, an energy savings performance contract and building an internal team of energy specialists.The organization ultimately selected Enfra in 2025 for a $54 million infrastructure investment involving thermal assets at its two largest hospital campuses.

Spencer said the arrangement lets Beacon spread the financial commitment over 30 years while using energy savings to offset costs.

The two campuses are serving as a pilot for the health system, which has nine other hospitals outside the agreement.

While Enfra provides EaaS solutions to higher education and healthcare facilities, Budderfly focuses on a different client base, primarily serving smaller to medium-sized businesses, including restaurants, retailers and fitness centers.

Derek Moskal, vice president of field operations, said in an interview that Budderfly pays for upgrades to equipment such as HVAC systems, lighting, refrigeration components and building controls. There are no upfront capital costs to the customer. Budderfly owns and maintains the equipment it installs during the contract.

Budderfly also takes over utility billing. Customers pay the company based on an agreed consumption baseline, while Budderfly pays the utility provider. The difference between customer payments and the provider's reduced energy expenses helps finance the improvements.

"Our job is to reduce the energy footprint and the cost to ourselves," Moskal said.

The company targets energy reductions of approximately 30%, although results depend on the facility and the improvements installed. Contracts typically last between 10 and 15 years.

Budderfly funds, installs and owns the equipment for the length of the agreement. When the term ends, customers can renew, often with a new round of upgrades, or take ownership of equipment that has been fully paid down, Moskal said.

Reducing maintenance

One of the principal selling points of EaaS is that building operators can transfer some maintenance and equipment-management responsibilities to specialists. For Budderfly customers, that can mean fewer calls to HVAC, lighting and refrigeration contractors.

Moskal said the company operates a service center that receives customer reports, evaluates problems and dispatches technicians when necessary. Remote monitoring can also identify equipment problems before customers report them.

When onsite service is required, Moskal said, Budderfly typically dispatches support within 24 to 48 hours. "If there's a problem, we'll fix it," he said of equipment Budderfly owns. The company can also provide maintenance services for existing customer-owned equipment.

Ferrera's experience illustrates that distinction.

Although Budderfly maintains equipment it installs at his restaurants, Ferrera remains responsible for repairs to HVAC systems he purchased himself. He also has a separate preventive maintenance arrangement with the company.

"If I provided it, I am still responsible for it," Ferrera said. "If Budderfly provided it, then Budderfly is."

At Beacon Health, the division of responsibilities is more complex, because the facilities operate around the clock and must meet patient-safety requirements.

Beacon's facilities managers remain responsible for their employees and overall hospital operations. Enfra has an energy manager embedded at each campus who coordinates with Beacon's facilities leadership.

Enfra’s personnel must follow Beacon's emergency management, infection-control risk assessment and construction risk assessment procedures. Spencer said Beacon also retains final authority over operational decisions. The agreement establishes uptime requirements and financial penalties if Enfra fails to meet its obligations. 

Spencer declined to disclose contractual provisions, citing confidentiality. He noted, however, "they are materially incentivized to deliver on their uptime guarantees."

Savings and operational improvements

Beacon has already exceeded its first-year energy savings guarantee, Spencer said.

The initial guarantee was approximately $1 million, reflecting early improvements involving controls and lighting. The system is now in its second year of the contract. "We've beat the first-year energy savings," Spencer said.

Beacon continues to pay its utility bills directly and manage energy purchasing decisions, including natural-gas hedging. Enfra guarantees reductions in energy consumption rather than electricity or natural gas prices.

That distinction matters because utility prices can fluctuate independently of building efficiency.

Spencer said Beacon evaluated thousands of potential energy-price scenarios before committing to the 30-year arrangement. The modeling identified a dramatic decline in future energy prices as the principal financial downside.

The contract also includes a continuous improvement plan intended to accommodate equipment replacements and technological changes over its duration.

For Ferrera, the benefits have accumulated over several years.

He said Budderfly's efficiency improvements helped keep his energy expenses near their original levels for several years despite rising utility prices. His bills did not begin to exceed their pre-contract levels until about two years ago.

The company upgraded lighting, installed refrigeration monitoring sensors and tested heat-rejection window film at his restaurants.

At one location in New Braunfels, Texas, Ferrera worked with Budderfly to install an ultra-high-performance HVAC system that maintains more consistent indoor temperatures and humidity.

The improved conditions have benefited both customers and employees, he said. They have also improved the quality of the restaurant's baked goods.

With less fluctuating airflow across the doughnuts, Ferrera said, the products retain their freshness throughout their intended shelf life.

Not every improvement has worked without adjustment. Ferrera recalled a Budderfly software update that disrupted thermostat schedules, requiring him to restore the settings. He nevertheless described the relationship as positive and said the technology gives him greater visibility into equipment performance.

What building operators should consider before signing Eaas contracts

Although EaaS arrangements can help building operators avoid large upfront capital expenditures, the agreements vary in how they allocate costs, maintenance responsibilities and financial risks. Understanding those terms is particularly important when contracts extend for decades.

For Beacon, the 30-year term required extensive analysis, because the agreement will outlast the careers of many of the executives.

Spencer said the organization evaluated performance guarantees, potential penalties, changing technology and energy-price risks before obtaining approval.

He advised facilities executives to begin by separating spending on major thermal infrastructure from general building maintenance expenses. That lets operators compare the cost of maintaining and replacing existing equipment with the proposed service arrangement.

"Is it more or less expensive than what we're doing now?” Spencer said. “Does it make it more or less reliable than what we're doing now? Do we use more or less energy than what we use now?" 

For Ferrera, the most important consideration in contract evaluation is understanding how the provider makes money and how the customer benefits.

He recommends operators examine the contract carefully, establish their current energy costs and determine whether the proposed arrangement will deliver measurable savings. "Make sure that it has terms that you can accept," he said.

For operators weighing whether to outsource energy infrastructure, the decision ultimately involves more than utility savings; it also requires evaluating reliability, operational control, maintenance responsibilities and the financial consequences of a long-term relationship with an outside provider.