This article first appeared on ‘Envirotec’ here

Businesses across Europe are facing mounting pressure to invest in more eco-friendly practices, but high upfront costs and operational challenges stand in the way. Neil Pein, CEO at BNP Paribas Leasing Solutions, explains how embracing Product-as-a-Service (PaaS) models can improve accessibility to green technology, support the circular economy and help organisations meet evolving regulatory requirements. 

The EU’s renewable energy target of 42.5% by 2030 is forcing organisations across all industries to rethink their business models. New regulations such as low emission zones, energy efficiency mandates and reporting requirements like the EU’s Corporate Sustainability Reporting Directive are turning up the heat for businesses to adopt more sustainable practices. While these policies present challenges, they also offer a huge opportunity for firms to invest in green technology.  

Fortunately, the green technology sector is rife with innovative solutions that are ready to support companies on this journey. From EV charging points to solar panels and LED lighting, green technologies are developing rapidly and will be central to helping organisations reduce their carbon emissions.  

So, what’s the catch? While the grass may be greener when it comes to leveraging certain technology, the challenge for businesses lies in the hefty gardener’s bill that comes with it. Big upfront costs remain one of the major barriers to investing in green technology. A rooftop solar energy system or an EV charger can cost thousands – if not tens of thousands – of euros upfront, with additional outlays for installation and maintenance. For businesses operating on tight margins and economic uncertainty, these costs can deter much-needed investment. 

As a result, businesses find themselves between a rock and a hard place. Regulatory requirements are pushing them to adopt more eco-friendly practices, but the financial burden of doing so is slowing down the pace of progress. 

A new route to sustainable profitability  

Investing in green technology and managing costs don’t have to be mutually exclusive. Product-as-a-Service (PaaS) business models offer a game-changing way to access green technology by shifting the focus from ownership to usage or business outcomes.  

Under a PaaS model, companies pay for the service or outcomes provided by a product, rather than owning the asset itself. This means predictable monthly payments replace large initial capital outlays. Additional services such as maintenance, upgrades, and insurance are often bundled into the contract, reducing operational complexity and ensuring optimal performance throughout the product’s lifecycle. 

Take the example of an EV charging station. Businesses pay for the electricity they consume, whilst the Charging Point Operator (CPO) is responsible for installation, maintenance and upgrades.  

This service-focused model provides the flexibility businesses need in today’s unpredictable environment. Companies can scale their usage of green technologies in line with business growth and adjust contracts to match evolving needs without the burden of capital-intensive purchases and big upfront investments. CPOs can offer membership plans and charging credits, catering to individual needs through integrated services. 

A win-win for all parties involved 

PaaS models also make economic sense for manufacturers of green technology products. By retaining responsibility for their products, manufacturers benefit from recurring revenue streams through ongoing service contracts rather than one-time sales, providing them with predictable cash flow. It also incentivises the design of more durable, repairable and recyclable technology, which in turn supports the circular economy. 

Manufacturers are ideally positioned to implement PaaS models, as they have deep product knowledge, control over product development, access to detailed operational data, and the ability to scale solutions. Those leading the transition towards service-based business models are offering significant value to customers and differentiating their brand in a competitive marketplace. 

A collaborative path to sustainability 

Collaboration is key to fulfilling the promise of PaaS across the green technology sector. Markets for products like solar panels and EV chargers are characterised by a complex and fragmented ecosystem with various interdependencies between different stakeholders. For example, most solar panel manufacturers are largely based outside of the EU, while smaller regional players handle installations for residential and small to medium commercial needs. 

Fragmentation in the market can make PaaS adoption more challenging as these circular models rely on a whole ecosystem approach. While the industry has seen some consolidation, with major players acquiring smaller companies or forming partnerships, more collaboration is needed to ensure these circular business models are viable and attractive to end-users. 

Regulatory pressures and corporate sustainability goals are driving demand for more greener solutions, yet traditional ownership models are no longer fit for this transition. By shifting the focus from ownership to usage or outcome-based services, PaaS opens the door for businesses to embrace green technologies without the burden of upfront costs, helping them stay on the right side of compliance in the process.  

For more insights into how PaaS is revolutionizing green tech, download our full report. 

As businesses and governments around the world grapple with the realities of climate change, the adoption of green technologies has become a critical priority. From renewable energy solutions to sustainable mobility, these technologies offer viable paths toward achieving net-zero goals. However, a significant challenge lies in the financial and operational barriers to adopting these solutions on a broad scale. This is where Product-as-a-Service (PaaS) models come into play, offering an innovative approach to procurement and management that aligns well with the principles of sustainability. 

What Is PaaS? 

PaaS shifts the traditional ownership model of goods and services toward a service-oriented framework. Instead of purchasing green technology assets outright, users pay for the benefits they derive from these assets. For example, a company needing solar panels might enter a PaaS agreement, paying a monthly fee for energy produced while the manufacturer retains responsibility for maintenance, upgrades, and eventual recycling. 

This model is inherently circular, promoting product lifecycle management over single-use consumption. It reduces waste, encourages efficient resource use, and ensures that products are designed with end-of-life recovery in mind. 

Accelerating sustainable mobility 

The transportation sector is undergoing a transformation, driven by stricter emissions regulations, electrification targets, and rising demand for clean mobility solutions. The European Union’s target of 30 million zero-emission cars by 2030 underscores the urgency. 

PaaS is playing a pivotal role in easing this transition. For businesses, PaaS models consolidate costs for electric vehicles (EVs), batteries, and charging infrastructure into a single, manageable contract. Manufacturers, energy providers, and financial institutions collaborate to deliver a comprehensive service package, covering installation, maintenance, and upgrades. 

Innovations such as Battery-as-a-Service (BaaS), solar-powered chargers, and Vehicle-to-Grid (V2G) technology align naturally with PaaS. By reducing upfront costs and bundling services, PaaS makes sustainable mobility more accessible for businesses and consumers alike. 

Promoting renewable energy 

Renewable energy adoption is central to achieving climate goals, yet high upfront costs often deter investment. PaaS models address this by offering predictable monthly payments, making solutions like solar panels, heat pumps, and LED lighting more financially accessible. 

For example, Solar-as-a-Service agreements, often structured as Power Purchase Agreements (PPAs), allow customers to pay for electricity generated by solar panels without owning or maintaining the system. Similarly, Lighting-as-a-Service contracts bundle maintenance, monitoring, and upgrades into a single service, reducing costs and improving efficiency for users. 

Benefits for Green Tech Manufacturers 

For manufacturers, PaaS offers financial stability through recurring revenue streams and deeper customer engagement. By retaining product responsibility, manufacturers can reclaim valuable materials at the end of the asset’s lifecycle, mitigating supply chain disruptions and raw material shortages. Bundled services like maintenance and data analytics create additional touchpoints, enhancing customer loyalty and satisfaction. 

Moreover, PaaS supports manufacturers in meeting regulatory demands for sustainable design and recycling, while reducing their environmental footprint. 

The Path ahead 

As the green tech sector continues to evolve, PaaS models are emerging as a vital enabler of sustainable development. They offer an innovative approach to overcoming financial, operational, and environmental barriers, accelerating the adoption of green technologies. 

By aligning economic incentives with sustainability goals, PaaS represents a win-win model for both manufacturers and end-users, paving the way for a greener, more sustainable future. 

For more insights into how PaaS is revolutionizing green tech, download our full report. 

This article first appeared on ‘Sustainability News’ here

With second-hand marketplaces rising and sustainability regulations tightening, businesses are rethinking their approach to technology procurement. Neil Pein, CEO of BNP Paribas Leasing Solutions, explores how Product-as-a-Service (PaaS) offers a long-term solution to e-waste, affordability, and global shortages – bringing in a new era of circular IT strategies. 

Second-hand marketplaces are booming, with cost and sustainability-conscious consumers flocking to websites and apps for electronics, clothes, homeware, and beauty products. Vinted, traditionally known for second-hand fashion, has recently launched its first dedicated electronics category, attracting customers with pre-loved smartphones, wearable tech, and audio devices.  

This shift extends beyond consumers – businesses, too, are rethinking how they manage, procure, and use technology, particularly as part of a wider push towards reducing e-waste and promoting circular economy practices. 

The IT industry has long been a champion for ‘as-a-service’ models, particularly for areas like cloud computing, software, and infrastructure. But now this model is also emerging as an efficient and sustainable alternative to the traditional ownership model. It’s grounded in an understanding of product lifecycles, offering assets to clients through usage or performance-based contracts instead of outright ownership – aligning IT procurement with sustainability goals, while improving cost efficiency.  

(E-)waste not, want not 

E-waste is one of the biggest causes of environmental harm. A record 62 million tonnes of e-waste was produced in 2022 – up 82% from 2010. By 2030, this is projected to rise to 82 million tonnes. Many of these discarded electronic goods end up in landfill, leaking hazardous materials which seep into soil, air, and water, causing serious environmental damages and health risks. 

A wave of sustainability regulations sweeping across Europe means that more and more businesses are turning to PaaS models to stay both compliant and competitive. Many IT businesses have begun setting ambitious targets to incorporate recycled components into new products and reduce their carbon footprints. Apple has tapped into the ‘recycle, reuse, replace’ attitude, pledging to include 100% recycled cobalt in its batteries by 2025.  

To achieve these targets and cut down e-waste, firms must consider how they can set up closed loop systems that allow customers to return used devices and recycle their components. This requires a shift from outright ownership to an IT procurement model where IT devices are acquired on a contract basis. Here, devices are procured, used, and then recovered for refurbishment and reuse – rather than going straight to landfill after their first lifecycle. Device refurbishment is an integral part of the service, ensuring businesses have a plan to measurably reduce emissions and waste that is built into their IT strategy. 

The hidden costs of new technology production 

The environmental costs of manufacturing new technology can often be overlooked – with its true impact slipping through the gaps somewhat unnoticed. For instance, data centres and electronic production are hugely resource-intensive, consuming vast swathes of energy and water. Annually, a 1-megawatt data centre can use the equivalent of the daily water consumption of around 300,000 people for cooling. Semiconductor manufacturing also has a huge water footprint, with the average chip manufacturing facility consuming 10 million gallons of ultrapure water every day.  

PaaS presents a more long-term solution to these challenges given it supports product lifecycle extension and enhanced device utilisation.  

Part of this includes designing new technology with its end-of-life in mind from the get-go – such as using modular components that allow for easier disassembly, repair, and recycling. This allows them to offer more affordable options to customers, while minimising environmental impact.   

For the cost-conscious buyers 

Embracing circular economy practices in the IT sector also makes financial sense. In Europe, the demand for refurbished smartphones is growing, expected to reach more than 431 million units by 2027 – as consumers seek modern technology more cheaply and sustainability. In the business world, PaaS models allow businesses to tailor their IT procurement strategies to match the needs of their workforce, without incurring high upfront costs. Value-add services, such as maintenance and support, help reduce overall IT expenditure while mitigating compliance, security, and sustainability risks.  

Alongside being costly and environmentally intensive, manufacturing new products is also becoming much more complex for businesses as they grapple with complex supply chains and access to raw materials.  

The global semiconductor chip shortage, kicked off in 2020 by the COVID-19 pandemic, caused knock-on supply issues which continued for more than three years. This brought the need for alternative sourcing strategies under the spotlight, particularly where resources are finite and susceptible to disruption. PaaS models offer a viable solution to ensure that the lights can stay on, while reducing the dependence on volatile supply chains.  

Striving for sustainability and cost efficiency has pushed PaaS models in IT to the forefront. As well as circular end-of-life handling for unwanted devices, PaaS solutions also offer more efficient in-life handling, like proactive maintenance services, to extend product longevity and reduce unnecessary waste. Embedding circularity into IT procurement strategies can play an important role in helping businesses to cut their environmental impact – enabling them to not just stay on the right side of compliance, but drive a more sustainable future. 

BNP Paribas Leasing Solutions has announced a partnership with Eaton, the intelligent power management company, to offer tailored finance solutions to help business owners accelerate their energy transition while preserving cashflow.

In an era of elevated energy prices, business owners are looking at ways to reduce energy costs and ensure business continuity. Energy storage, uninterruptible power supplies (UPS) and EV charging infrastructure can help them to achieve these goals.

The solution developed by Eaton and BNP Paribas Leasing Solutions offers cashflow-friendly payment plans for infrastructure and equipment, and also integrates access to Eaton’s global service network.

Pascale Favre, Head of the Technology Lifecycle Solutions business line at BNP Paribas Leasing Solutions said: “Eaton’s approach is in line with our aim to support the transition to a net zero economy which is at the very heart of our GTS 2025 Plan. This is why we are looking forward to accompanying Eaton and its customers to invest in sustainable infrastructure and equipment.”

BNP Paribas Leasing Solutions and Eaton

Andreea Laplace, Strategic Financing and Venture Business Development Director at Eaton, said: “By taking an integrated approach to the energy transition, businesses will reap additional cost-savings and reduce their carbon footprint. Our Buildings as a Grid approach can include any combination of EV charging infrastructure, energy storage and renewable generation, but implementing all three yields most benefits. The solution we have developed with BNP Paribas Leasing Solutions gives customers access to energy transition technologies affordably, helping them to conserve cash while at the same time make a positive environmental impact.”

The finance programme is available now in France, Spain, Norway and Switzerland, with further European expansion planned in 2023.

ABOUT EATON

Eaton is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re accelerating the planet’s transition to renewable energy, helping to solve the world’s most urgent power management challenges, and doing what’s best for our stakeholders and all of society.

Founded in 1911, Eaton has been listed on the NYSE for nearly a century. We reported revenues of $19.6 billion in 2021 and serve customers in more than 170 countries.

For more information, visit www.eaton.com. Follow us on Twitter and LinkedIn.