Current Size and Remaining Market Potential of the U.S. Energy Service Company Industry

In this study, we analyze the market size, growth projections and industry trends in the U.S. ESCO industry, drawing on information from interviews with ESCO executives conducted in late 2012. We define ESCOs as energy service companies for whom performance-based contracting is a key business activity; 45 companies met our definition of an ESCO. We were able to interview 35 of these companies, which represents ~78% response rate. The non-respondent ESCOs were small companies in terms of revenue, representing about 2% of industry revenues.

We also provide a preliminary estimate of remaining ESCO market potential in terms of the one-time project investment potential and annual blended energy savings remaining in U.S. buildings typically addressed by ESCOs, based on market penetration estimates provided by ESCOs and industry experts. Finally, we report the range of impacts of the U.S. economic recession on ESCOs’ state and local institutional projects and their use of incentives, tax credits, and financing mechanisms.