Kaer’s Cooling as a Service: Selling Cooling Instead of Equipment

MaMeeFarm™ Case Studies | Building Operations • Energy Services • Business Models

27 October 2026

An office building, factory or data centre needs reliable cooling to support its daily operations. Traditionally, obtaining that cooling involves purchasing equipment, maintaining the system, paying electricity bills and eventually replacing machinery as it ages.

Singapore-based Kaer offers a different arrangement.

Through its Cooling as a Service (CaaS) model, customers purchase cooling rather than owning and operating the equipment needed to produce it.

The distinction changes the commercial relationship between building owners and cooling providers. Instead of investing directly in a cooling plant, customers enter an ongoing service agreement with a company responsible for delivering the required cooling.

A documented retrofit at Singapore’s 7000 AMK facility illustrates how this model can operate in practice.

Buying Cooling Instead of a Chiller

Kaer’s service offering includes two arrangements known as Kaer Water and Kaer Air.

Under Kaer Water, the company designs, installs, finances, owns, monitors and operates the chilled-water system within a building.

The customer specifies the chilled-water temperature required and purchases the cooling delivered by the system.

Kaer Air extends the service to include air-side equipment, allowing customers to specify conditions within occupied spaces.

The distinction matters because producing chilled water and maintaining the required conditions inside a building involve different equipment and operating responsibilities.

Both services allow customers to purchase cooling on a consumption basis rather than making the same upfront investment in equipment ownership.

The machinery remains necessary. What changes is who finances, manages and maintains it.

For a building owner, this can shift a major equipment purchase into a continuing commercial relationship with a specialist service provider.

For Kaer, it creates a business built around providing cooling over time rather than completing a one-time equipment sale.

A Real-World Retrofit at 7000 AMK

The Cooling as a Service Initiative published a case study describing Kaer’s work at 7000 AMK, a large Singapore facility accommodating data centres and manufacturing operations.

According to the historical case study, the facility’s owners evaluated options for an ageing cooling system in 2014.

The building required cooling around the clock, making the continuity of operations an important consideration during refurbishment.

Rather than purchasing and managing an entirely new cooling system themselves, the owners adopted a service arrangement with Kaer.

Kaer initially took over operation of the existing chiller plant and introduced monitoring and control technology.

The company subsequently replaced and expanded parts of the cooling equipment.

In 2015, two new chillers, each with a capacity of 900 refrigeration tons, were installed.

In 2016, another two chillers, each rated at 800 refrigeration tons, were added to accommodate increasing cooling requirements.

The case study reports that the retrofit work was carried out without disrupting the facility’s operations.

That statement represents the project’s reported outcome. The publication does not provide independent operating records sufficient to verify every period of system availability.

Nevertheless, the documented sequence shows how a cooling service provider can assume responsibility for existing infrastructure while progressively introducing replacement equipment and additional capacity.

Keeping the Building Operating During Replacement

Replacing cooling equipment in an occupied building is different from installing a system before a property opens.

Manufacturing processes, data centres and other building activities may need uninterrupted temperature control.

Equipment replacement must therefore be coordinated with ongoing cooling requirements.

At 7000 AMK, the project involved taking over an existing plant before introducing additional monitoring, automation and new chillers.

This allowed the cooling operation and equipment upgrades to be addressed within the same service relationship.

The reported sequence also demonstrates why cooling contracts concern more than equipment performance.

The customer depends on the provider’s ability to deliver the required cooling while managing maintenance, upgrades and changes in demand.

For buildings with continuous operations, service reliability is an essential part of the commercial arrangement.

Measuring What Customers Consume

Kaer’s published service information describes charging customers according to metered cooling consumption.

The unit used is the refrigeration ton-hour, commonly abbreviated as RTH.

This measures an amount of cooling delivered over time.

It differs from measuring the electricity consumed by the equipment that produces the cooling.

A building requiring more cooling generally purchases more units of cooling service, while the provider manages the equipment and resources required to deliver that output.

Kaer’s FAQ also describes how utility expenses are handled.

The company states that it assumes responsibility for the utilities associated with the chiller plant.

Where the building owner pays those utility bills directly, the monitored value can be deducted from the monthly service charge to reimburse the owner.

This arrangement distinguishes the cost of delivering cooling from the amount of cooling purchased.

It also creates a commercial reason for the service provider to operate equipment efficiently.

When a provider receives payment for cooling output while carrying associated operating costs, reducing the resources needed to deliver that output can support its financial performance.

However, this commercial incentive does not establish that every building will achieve lower overall costs.

Actual results depend on equipment performance, cooling demand, utility prices and the terms of the individual agreement.

Ownership Changes, but Investment Remains

Cooling as a Service changes how equipment investment is organized.

Under conventional ownership, the building owner purchases cooling equipment and takes responsibility for the associated operating arrangements.

Under Kaer’s model, the provider finances and owns the equipment covered by the service agreement.

The customer purchases cooling rather than acquiring the underlying machinery.

This may reduce the customer’s need for an immediate capital investment in a replacement cooling plant.

It does not eliminate the cost of equipment from the overall business.

The provider must still finance the machinery, maintain it and recover the costs of delivering the service over time.

The model therefore creates different financial responsibilities for the two parties.

For building owners, the attraction may include reduced equipment-management responsibilities and greater focus on the activities taking place inside the property.

For the provider, the arrangement depends on maintaining equipment performance and generating sufficient service revenue throughout the agreement.

The Importance of Contract Terms

A consumption-based service still depends on a long-term contract.

Kaer’s published FAQ states that a typical Cooling as a Service agreement lasts 15 years.

The company describes its service rates as fixed under the agreement but also indicates that rates may change in response to external factors, including utility tariffs and inflation.

The practical meaning is that a contracted rate should not automatically be understood as an unchanged price for the entire service period.

The FAQ also describes an exit arrangement through which customers may take ownership of the equipment back using an agreed formula.

The availability of that arrangement does not establish that ending a contract is free of financial consequences.

The published information explains Kaer’s general commercial offering.

It does not disclose the complete contractual conditions, prices, indexation mechanisms or exit payments applicable to the historical 7000 AMK project.

For customers, these distinctions are important because the agreement determines not only how cooling is purchased but also how responsibilities and costs are managed over time.

A Different Relationship Between Equipment and Service

Kaer’s model illustrates how an equipment-intensive business activity can be offered as an ongoing service.

The customer requires a dependable outcome: cooling delivered at the conditions needed for the building.

The provider organizes the assets, maintenance and operating capabilities required to deliver that outcome.

The 7000 AMK case demonstrates a historical application involving an existing cooling plant, monitoring systems, equipment replacement and later capacity expansion.

Kaer’s published service terms provide additional context for the commercial arrangement, including consumption-based charges, utility responsibility and long-term contracts.

The available evidence does not establish the profitability of the project or demonstrate that service purchasing is financially preferable to equipment ownership in every situation.

It also does not provide independently verified measurements sufficient to determine the project’s complete environmental performance.

Those outcomes would depend on the actual equipment, operating conditions, costs and contractual obligations involved.

What the Kaer Case Reveals

Kaer’s Cooling as a Service demonstrates how a company can sell an essential operating outcome rather than the equipment traditionally associated with producing it.

For building owners, the arrangement changes the immediate purchasing decision.

Instead of buying a chiller plant and managing its operation, the customer purchases cooling through a continuing service relationship.

For the provider, the responsibility extends beyond supplying machinery. It includes maintaining the operating capability necessary to deliver cooling throughout the agreement.

The 7000 AMK retrofit illustrates how that responsibility can include taking over existing infrastructure, introducing monitoring systems and replacing equipment while a facility continues operating.

The broader business significance is the separation of equipment ownership from the customer’s need for its output.

The building still requires machinery, energy and maintenance. Those responsibilities remain part of the business, but they are organized through a different commercial relationship.

Kaer’s experience shows how the provision of cooling can become a service business built around continuing delivery rather than a single equipment transaction.

Its long-term value depends on the reliability of that delivery, the responsibilities established by the contract and financial arrangements that remain workable for both provider and customer.

Sources

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