@techreport{61708,
  author = {Elizabeth Stuart and Peter H Larsen and Juan Pablo Carvallo and Charles A Goldman and Donald Gilligan},
  title = {U.S. Energy Service Company (ESCO) Industry: Recent Market Trends},
  abstract = {<p>Key highlights from U.S. Energy Service Company (ESCO) Industry: Recent Market Trends</p><ul><li>After more than two decades of year-over-year growth, ESCO industry revenues appeared to flatten between 2011 and 2014. ESCOs reported 2014 industry revenue of approximately $5.3 billion, the same as revenues reported in 2011.</li><li>Based on ESCOs{\textquoteright} 3-year growth projections, ESCOs expect total annual industry revenues to be approximately $7.6 billion in 2017, which equates to an average annual growth rate of ~13\% between 2015 and 2017.</li><li>Public and institutional market sectors accounted for 85\% of industry revenue in 2014, which is consistent with previous study findings.</li><li>Performance contracting generated 75\% ($3.7 billion) of industry revenue in 2014, which is somewhat higher than the 69\% share reported in 2011 and 2008. Design-build projects contributed the next largest share of 2014 revenue (16\% or ~$800 million), followed \&nbsp;by consulting services (5\%), onsite generation power purchase agreements (3\%) and other activities (2\%).</li><li>The share of industry revenue contributed by large ESCOs (annual energy services revenue of $300M or greater) declined somewhat between 2011 and 2014 (56 vs 51\% of total industry revenues). \&nbsp;Medium-sized ESCOs (annual revenues between $100M and $299M) increased market share from 29\% in 2011 to 33\% in 2014. Small ESCOs (annual revenue \&lt;$100M) increased their share of total industry revenue from 15\% in 2011 to 16\% in 2014.</li><li>Share of industry revenues by ESCO size varies in different regions across the U.S. Large ESCOs accounted for 60-80\% of industry revenues in West North Central, Middle Atlantic and New England regions. However, in the West and South Central regions, medium and large ESCOs had nearly equal share of revenue (~40\% and 45\% respectively).</li><li>New customers accounted for the majority of performance-based revenue during the years 2012-2014, with some variation by market segment.</li><li>ESCOs incorporate at least one of six key types of non-energy benefit in performance-based projects across all market segments.</li><li>More than half of the ESCOs serving each market segment reported leveraging local, state or federal tax benefits in projects.</li><li>ESCOs reported use of various financing approaches for each market segment. Most federal projects were financed using term loans. Financed projects for state and local governments, universities, colleges and K-12 schools, and healthcare facilities made extensive use of leases and term loans. Bonds were used almost exclusively for state/local and K-12 schools projects.</li></ul><p>The authors also discuss a number of factors that may have contributed to the industry growth slowdown between 2011 and 2014.</p>},
  year = {2016},
  note = {<p>A journal article "Understanding recent market trends of the US ESCO industry" published in <em>Energy Efficiency</em> can be found <strong><a href="http://link.springer.com/article/10.1007/s12053-018-9633-9" target="_blank">here</a></strong>.\&nbsp;</p>},
}