Revenues for U.S. Energy Service Companies to Reach $13 Billion by 2020

February 2, 2012

While the energy service company (ESCO) industry has been active for approximately 30 years, it continues to evolve in response to business opportunities and economic trends.  Today, 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 for ESCOs.  According to a new report from 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, the cleantech market intelligence firm forecasts.

“The full impact of recent federal stimulus funding has yet to be realized,” says research analyst Brittany Gibson.  “But the American Recovery and Reinvestment Act of 2009 has directed billions of dollars into energy efficiency projects at all levels of government and in all geographic regions of the nation, driving increased investment and accelerating innovation among ESCOs.”

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, wherein funding for individual projects is based on a promise of “guaranteed savings” to facility owners/managers.  In particular, the 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. 

Pike Research’s report, “The U.S. Energy Service Company Market”, describes the continuing evolution of the ESCO market, detailing drivers and barriers to deeper penetration of energy efficiency in the U.S. economy.  The study focuses on the role that performance contracting is playing as a vehicle for financing efficiency projects for public entities that face budget and credit limitations, as well as the convergence of new technologies and service offerings into traditional energy conservation projects.  Key industry players are profiled in depth and market forecasts extend through 2020.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@navigantresearch.com

Register to Receive Updates

Sign up or login to receive free newsletters, research updates, access to webinars, and other analyst content from Navigant Research.

Research News

Rss
Utilities and Grid Operators Will Invest More than $42 Billion in Flexible Alternating Current Transmission Systems from 2014 to 2022
July 29, 2014The growth in distributed renewable energy resources is driving demand for large-scale FACTS deployments, report concludes • The first flexible alternating current transmission systems (FACTS), which mitigated voltage drops on the…
Read More »
Shipments of Smart City Communications Nodes Will Reach Nearly 55 Million Annually by 2020
July 28, 2014Fragmentation across sectors and departments is a persistent problem, report finds • Ubiquitous and embedded communication services lie at the heart of the innovations in energy,…
Read More »
Commercial Building Owners and Managers Will Invest Nearly $960 Billion in Energy Efficiency Retrofits from 2014-2023
July 24, 2014 Payback periods remain a critical factor for decision-makers on retrofit projects, report finds • Because the existing building stock dwarfs the amount of building space that is added…
Read More »
Lithium Ion Batteries for Consumer Electric Vehicles Will Surpass $24 Billion in Annual Revenue by 2023
July 22, 2014Automakers have yet to agree on battery performance standards, report finds • Lithium ion (Li-ion) batteries have emerged as the leading battery technology for a wide…
Read More »
View All News

{"userID":"","pageName":"Revenues for U.S. Energy Service Companies to Reach $13 Billion by 2020","path":"\/newsroom\/revenues-for-u-s-energy-service-companies-to-reach-13-billion-by-2020","date":"7\/31\/2014"}