Heat-as-a-Service takes geothermal from a capital-intensive power project to a financeable, contract-based heat utility: instead of selling electrons, you sell stable, decarbonized heat under long-term contracts that match what industrial customers and investors actually want.
Image: A thematic picture of a geothermal power plant
By shifting risk and ownership away from end users and toward specialised developers and infrastructure capital, it can unlock geothermal in markets where electricity tariffs are low but demand for reliable, low-carbon process heat is strong.
From kWh to “heat-as-a-service”
Traditional geothermal projects earn revenue by selling electricity into a grid, often at wholesale prices that barely cover high up-front drilling and plant costs unless there is a feed-in tariff or premium.Many industrial users, however, do not need electricity; they need heat for processes like brewing, greenhouse climate control or pulp and paper production, and they currently buy that heat indirectly via fossil fuels.
The Heat-as-a-Service (HaaS) model reframes geothermal as a service rather than an asset. A developer finances and builds the wells and surface equipment, then sells delivered heat at the fence line—typically hot water or steam at a specified temperature and flow—under a long-term contract that resembles a heat power purchase agreement (PPA). Customers pay a predictable per‑megawatt‑hour heat price or capacity fee without putting the project on their own balance sheets, while developers earn annuity-like cash flows backed by real assets.
Baseload Capital’s portfolio approach
Baseload Capital illustrates how this business model is being deployed in practice. Founded in Sweden as a specialised investment entity, Baseload raises capital through equity and green bonds and channels it into geothermal “heat power” projects worldwide, with subsidiaries in Iceland, Japan, Taiwan and the United States that develop and operate local plants.The parent company focuses on financing, market analysis and technical know‑how, while Baseload Power subsidiaries secure resources, permits, land leases and off‑take agreements for heat and/or power.
Their approach treats geothermal projects as part of a global portfolio, spreading geological and policy risk across multiple countries and customer types.
Why heat, not just power?
Several forces push developers toward heat-as-a-service rather than pure electricity generation. First, industrial and district heating customers value heat at the point of use more highly than grid operators value additional bulk electricity, especially in markets with low wholesale power prices or high renewable penetration. Selling heat can therefore produce higher effective revenues per unit of geothermal energy, which improves project economics without requiring subsidies.
Second, heat demand is often flatter and more predictable than electricity prices. Breweries, greenhouses and paper mills run thermal processes with relatively steady profiles, making it easier to design baseload or mid‑load geothermal supply and match it with long‑term take‑or‑pay contracts.[2] Third, for many industrial users, decarbonising process heat is a harder problem than buying renewable electricity certificates, so geothermal HaaS can be marketed as a turnkey decarbonisation solution that helps them hit climate targets without building new assets themselves.
Case study: industrial heat and data centres
While much of Baseload Capital’s public messaging focuses on power, their contracts often blend electricity and heat sales, and some newer deals highlight the service mindset. In Taiwan, Baseload signed a corporate PPA with Google to supply about 10 MW of geothermal capacity to power data centres and offices, with Google also taking an equity stake to catalyse market development.The project will roughly double Taiwan’s currently operating geothermal capacity once it comes online, and it is structured around long‑term delivery of firm, clean energy rather than spot power sales.
Although that agreement is framed as a power PPA, it shows how large technology buyers—effectively sophisticated HaaS clients—are willing to sign long‑term contracts for 24/7 clean supply when the product matches their operational needs. The same logic applies to industrial heat customers: a brewery or greenhouse does not want to own wells and turbines; it wants guaranteed thermal output, with performance and resource risk pushed back onto a developer who can diversify across multiple projects.
Financing HaaS: green bonds and infrastructure capital
For CFOs and infrastructure funds, HaaS looks familiar: it turns a complex technical project into a contracted infrastructure asset with project-financeable cash flows. Baseload Capital, for instance, has issued green bonds whose frameworks describe investments in geothermal heat and power projects that meet specific environmental and reporting criteria.[8][2] Bond proceeds help finance early‑stage drilling and plant construction, while long‑term heat or power contracts anchor the revenue side.
This structure opens geothermal to capital pools that might otherwise shy away from exploration risk. Investors like Baker Hughes have made strategic investments in Baseload to accelerate next‑generation geothermal technologies from pilot to commercial scale, explicitly citing the company’s portfolio model and project pipeline. By aggregating multiple HaaS-style projects under one platform, Baseload can spread risk and offer investors exposure to a diversified set of contracts rather than a single risky well.
Contract structures and risk allocation
At the contract level, HaaS deals typically resemble power purchase agreements but with heat-specific parameters. Key elements include contract term (often 10–20 years), minimum contracted capacity or energy, price escalation mechanisms, performance guarantees and force majeure clauses that address resource variability or operational issues. The developer is usually responsible for drilling, plant construction, operation and maintenance, and bears the risk that the resource underperforms; the customer commits to buying a defined amount of heat or paying a capacity charge even if their demand fluctuates, within agreed flexibility bands.
This allocation suits both sides. Industrial customers avoid up‑front capex and technical risk, while developers can finance wells and plants based on contracted revenue rather than uncertain spot markets. The model also allows creative structures like “as-a-service” subscriptions where smaller customers share a common resource via a local district heating network or cluster of industrial users. As markets mature, secondary investors can buy into operating HaaS assets, providing exit options for early-stage developers and recycling capital into new projects.
Case study: waste heat and low-temperature resources
Another practical application of HaaS is in capturing waste heat or low‑temperature geothermal resources that would be uneconomic if used solely for power. Baseload describes “heat power” as an affordable form of renewable energy that can be harnessed from either geothermal or waste heat streams, with its subsidiaries working with local communities and power companies to permit and operate such plants. In these cases, the product sold might be both electricity and heat, or in some configurations primarily heat into a district heating system.
By wrapping this into a service contract, developers can make use of marginal resources that traditional utilities ignore. For example, a low‑temperature well that cannot justify a full power plant might still deliver valuable heat to a greenhouse cluster if the developer handles the capex and sells thermal energy under HaaS agreements.This expands the addressable resource base and helps make geothermal viable in markets where grid prices alone would not support investment.
Unlocking low-price electricity markets
One of the core promises of HaaS is that it decouples geothermal economics from wholesale electricity prices. In markets with cheap power—due to hydro, coal or heavily subsidised generation—selling electricity from a new geothermal plant can be uncompetitive, especially without policy support. However, industrial heat users in the same markets may still pay high effective prices for fossil-based heat once fuel costs, carbon prices and logistics are factored in.
By targeting these customers directly and selling heat, HaaS can unlock revenue streams that do not depend on grid parity. The model is particularly attractive where carbon pricing, ESG pressures or corporate net‑zero commitments make low-carbon heat a premium product. Infrastructure funds and VCs evaluating HaaS deals will ask the familiar questions: how strong are the counterparties, what is the regulatory stability, and how well are resource and construction risks mitigated? But if those boxes are ticked, HaaS can look like any other contracted infrastructure opportunity.
Challenges and limitations
Despite its promise, Heat-as-a-Service is not a panacea. Geothermal risk remains real: drilling can fail, resources can underperform, and local opposition or permitting delays can derail projects.[2] Service contracts shift some risk from customers to developers, which means developers need strong technical capabilities, conservative resource assessments and contingency plans to avoid under‑delivery and penalties.
Contracting industrial heat also raises practical issues. Customers may be reluctant to commit to 15–20‑year deals if their own production plans are uncertain, or they may demand flexible volumes that complicate project sizing and financing.Regulators in some jurisdictions may not yet recognise or support third‑party heat utilities, creating legal and tariff uncertainties. And while data‑centre PPAs and similar deals show corporate appetite for contracted clean energy, building similar demand for geothermal heat will require education and demonstration projects.
Outlook for HaaS in geothermal
Even with these challenges, the trendline is clear. Specialised investors like Baseload Capital are building portfolios of geothermal heat and power assets, backed by green bonds and strategic partners, and targeting customers ranging from utilities to tech companies and industrial heat users. As more projects demonstrate reliable service under long‑term contracts, Heat-as-a-Service could become a standard way to structure geothermal development, especially in markets where electricity prices alone cannot justify new plants.
For CFOs, VCs and infrastructure funds, HaaS reframes geothermal as an infrastructure and services play rather than a pure resource gamble. Projects can be sized and staged to match specific contracts, with risk diversified across multiple assets in different markets.[ For industrial customers, it offers a path to decarbonise heat without the capex nightmare of owning wells and plants, turning geothermal into a subscription-like service rather than a one‑off mega‑project. Whether HaaS becomes the dominant model will depend on how quickly developers can prove performance, standardise contracts and build trust—but the case studies emerging today suggest this is one of the most promising ways to bring geothermal out of the niche and into mainstream climate and infrastructure portfolios.
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