Cooling-as-a-Service: Catalyzing a Strategic Evolution in Latin America's HVAC Industry

Press Release, Trends & Insights

In a world increasingly focused on global warming and energy efficiency, Latin America's HVAC (Heating, Ventilation, and Air Conditioning) industry is undergoing a transformative shift. This evolution is driven by the advent of Cooling-as-a-Service (CaaS), an innovative approach that not only aligns with global sustainability goals, but also caters to the growing cooling demands. Known as well as “servitization”, this trend is transitioning the industry from traditional product-centric or rental models to a service-oriented subscription model; a practice more prevalent in Europe but now slowly gaining momentum in Latin America.

But what exactly does this paradigm shift entail? Instead of the conventional purchase or rental of physical equipment, CaaS allows customers to enter contracts based on specific service outcomes, like maintaining certain temperature ranges or paying for units of cold air. This arrangement, typically more costly than traditional electricity per unit, incentivizes customers to minimize cooling consumption.

This innovative pay-per-service approach effectively removes the initial investment barrier for customers. Under CaaS contracts, the provider or financier assumes ownership of the equipment and responsibility for maintenance and utility bills, motivating them to ensure high-quality maintenance and energy efficiency.

CaaS Cooling-as-a-Service business model

The Urgency of Efficient Cooling

Addressing climate goals, especially reducing emissions from air conditioning and cooling systems, is critical. The International Energy Agency Future of Cooling report estimates that $6.9 trillion USD will be invested in air conditioning globally over the next 30 years. Currently, cooling accounts for 10.0% of global electricity consumption, a figure expected to triple by 2050, consuming as much electricity as all of China and India today. 

The Climate Finance Lab indicates that if CaaS captures 2.0% of commercial cooling assets in developing countries by 2030, it could represent over $88.0 billion in commercial cooling finance.

The inefficiency of current cooling systems is a significant issue, with average efficiency below half of what is available and a third of the best technology. The potential savings by 2050 are substantial. Furthermore, Hydrofluorocarbons (HFCs) used in cooling are potent greenhouse gases that must be phased down. In regions like Latin America, where heat stress already causes annual GDP losses of $52.3 billion, efficient cooling is not a luxury but a necessity.

According to the Climate Finance Lab, CaaS can save up to 23.0% of cooling costs for customers and reduce emissions from electricity use and coolant leakage by up to 49.0% while promoting a circular economy through modular, reusable, and recyclable equipment.

Latin America: Challenges Amid Opportunities

Despite its early stage, the demand for CaaS is growing in Latin America, especially in sectors with high cooling needs, such as the hospitality industry. Mexico and Brazil, followed by Argentina and Costa Rica, are recognized as having significant potential for implementing CaaS in the region.  

In Mexico, one of main markets around the world poised for growth in cooling demand, installation and operation for seven years of a single 1200-TR (tons of refrigeration) high-efficiency chiller through CaaS yields a reduction of nearly 18,000 tons of CO2 emissions when compared to the operation of a legacy low-efficiency unit over the same period. This emissions reduction from a single system is equivalent to the energy use of 1,945 homes for one year.

Industry participants interviewed by Verify Markets highlight the slow but growing interest and application of CaaS in Latin America. Some Mexican temporary cooling rental firms are increasingly adopting the CaaS model, offering extensive maintenance agreements on a monthly subscription basis. One industry player in Mexico shared, “We had so much demand that I told some clients they needed to contract a policy with us. We take care of their equipment, monitor them, and perform preventive and corrective maintenance for a monthly fee. This model has been very viable for us.”

However, transitioning from traditional ownership to a service-based model in Latin America has its challenges, primarily in altering consumer mindsets. The shift towards renting versus owning is gradual, with cultural adjustments needed.

According to a market participant interviewed by Verify Markets, Despite all the benefits of renting, people still want to own their machines. The main competitors for rental companies are the machine sellers. The change is very slow, and there is a lot of cultural work to be done.” Another cooling rental firm added, "In Latin America, unlike the United States or Europe, we approach financial mathematics differently. They would never buy a machine that they can rent if renting makes more financial sense. Here, in Latin America, the combination of a higher cost of capital and a culture that leans towards, ‘If I can, I'll buy it and it's mine,' puts us behind in terms of rental compared to other regions of the world."

Challenges remain, as another industry voice pointed out, “Getting people to understand the concept of CaaS is quite a challenge. Negotiating and convincing the customer can be difficult in this part of the world.”

Even with these obstacles, CaaS is slowly establishing itself as a viable, cost-effective, and convenient cooling solution. Another participant noted the creativity involved in structuring CaaS agreements, stating, “We are offering CaaS, and it's mixed with rental, with the difference lying in the fine print of the rental agreement. By saving the customer the installation cost, it's a way to gain free financing.”

Cooling-as-a-Service in Latin America heralds a progressive approach to HVAC management, offering flexibility, cost savings, and resource efficiency. As the region adapts to this model, it stands on the cusp of revolutionizing the HVAC industry, promising innovative solutions for cooling needs. The road ahead involves customer education and service model refinement, but the potential benefits position CaaS as a trend to watch in Latin America's cooling rental market.


A copy of the Latin American Temporary Cooling Rental Market research report can be obtained at Follow us for more updates on Twitter @verify_markets and LinkedIn. This report is part of Verify Markets’ Energy & Power Equipment market research and consulting practice. Other power rental market reports:


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