The U.S. Energy Service Company Market

The U.S. energy service company (ESCO) market has been championed over the last 30 years as a breakthrough in energy efficiency financing. ESCOs use a range of energy efficiency financing instruments, such as energy performance contracting (EPC), to help customers finance energy efficiency upgrades through the future energy savings that energy efficiency can generate. This market is strongest in the municipal, university, schools, and hospital (MUSH) sector, with significant activity in the federal sector as well. The market landscape includes a number of large building equipment manufacturers such as Johnson Controls and Honeywell, as well as other ESCOs affiliated with utilities and engineering service providers.

In recent years, the U.S. ESCO market has gone through a difficult period. Customer concerns about the impact of EPCs on their financial position, as well as a lack of supportive policies, have slowed market activity. Since many of the resources, including policy measures that drove growth prior to 2011 have been exhausted, ESCO market activity has slowed considerably. Various ESCOs have reported declines in revenue in 2012 and 2013 compared with 2011. However, as the market regains health over the next 2 to 3 years, the ESCO business model will start to evolve. Growing demand for renewable energy systems and distributed energy infrastructure is leading many ESCOs to develop and acquire new capabilities. Navigant Research forecasts that the U.S. ESCO market will grow from $4.9 billion in 2013 to $8.3 billion by 2020.

This Navigant Research report examines the ESCO market in the United States, detailing drivers and barriers to the deeper penetration of energy efficiency in the U.S. economy. The study covers all ESCO sectors, including MUSH, federal, commercial and industrial, and public housing. Market forecasts of ESCO revenue in the United States, segmented by sector and technology, extend through 2020. The report also analyzes various ESCO financing models and energy efficiency technologies and profiles key industry players.

Key Questions Addressed:

  • What is an ESCO?
  • Who are the key players in the U.S. ESCO Market?
  • How is the ESCO busines model changing?
  • What are the key market and policy drivers supporting the U.S. ESCO market?
  • How large is the U.S. ESCO market and which segments will experience the fastest growth?

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