BIG BUCKS IN BUILDINGS’ ENERGY

Revenues for U.S. Energy Service Companies to Reach $13 Billion by 2020
February 2, 2012 (Pike Research)

"While the energy service company (ESCO) industry has been active for approximately 30 years…newer service offerings, such as demand response and energy management software, enabled by intelligent metering and control systems that afford customers greater flexibility and control over their energy usage, are opening new opportunities…[According to] Pike Research, the ESCO market for energy efficiency project installations and services in the United States exceeded $5.1 billion in 2011.

"Driven by public policies that encourage a greater emphasis on energy efficiency to reduce costs and improve operations, this market is expected to continue to grow faster than the domestic economy and reach at least $13 billion in sales by 2020. Under a more aggressive scenario, the ESCO market could reach $16 billion by 2020…"

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"The ESCO market predominantly takes the form of direct contracting between providers of energy efficiency services and equipment and government agencies, public institutions, and commercial customers – typically via performance-based contracts…[T]he federal sector’s appetite for this energy service performance contract model is growing, helping give rise to a market structure dominated by a group of very large companies that specialize in these contracts…

"…At the same time, project sizes are increasing as clients look for more comprehensive technologies and designs to address their energy consumption. Of particular significance for ESCOs is President Obama’s 2009 executive order, which mandates that all federal agencies must achieve a 30% reduction in energy use by 2015…"