Review of U.S. ESCO Industry Market Trends: An Empirical Analysis of Project Data
Date Published |
01/2005
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Publication Type | Journal Article
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Authors | |
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LBL Report Number |
LBNL-52320
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Abstract |
This article summarizes a comprehensive empirical analysis of U.S. energy service company (ESCO) industry trends and performance. We employ two parallel analytical approaches: a comprehensive survey of firms to estimate total industry size and a database of ~1500 ESCO projects, from which we report target markets and typical project characteristics, energy savings and customer economics. We estimate that industry investment for energy-efficiency related services reached US$2 billion in 2000 following a decade of strong growth. ESCO activity is concentrated in states with high economic activity and strong policy support. Typical projects save 150-200 MJ/m2/year and are cost-effective with median benefit/cost ratios of 1.6 and 2.1 for institutional and private sector projects. The median simple payback time is 7 years among institutional customers; 3 years is typical in the private sector. Reliance on DSM incentives has decreased since 1995. Preliminary evidence suggests that state enabling policies have boosted the industry in medium-sized states. ESCOs have proven resilient in the face of restructuring and will probably shift toward selling "energy solutions", with energy efficiency part of a package. We conclude that a private sector energy-efficiency services industry that targets large commercial and industrial customers is viable and self sustaining with appropriate policy support – both financial and non-financial. |
Journal |
Energy Policy
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Volume |
33
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Year of Publication |
2005
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Pagination |
44
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Publisher |
LBNL
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Place Published |
Berkeley
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Refereed Designation |
Unknown
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Keywords | |
Organizations | |
Research Areas | |
File(s) | |
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