Review of U.S. ESCO industry market trends: An empirical analysis of project data
- LBNL Library
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 {approx}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.
- Research Organization:
- Ernest Orlando Lawrence Berkeley National Laboratory, Berkeley, CA (US)
- Sponsoring Organization:
- USDOE. Office of Electric Transmission and Distribution, Assistant Secretary of Energy Efficiency and Renewable Energy (US)
- DOE Contract Number:
- AC03-76SF00098
- OSTI ID:
- 841697
- Report Number(s):
- LBNL--52320
- Journal Information:
- Energy Policy Journal, Journal Name: Energy Policy Journal Journal Issue: 3 Vol. 33
- Country of Publication:
- United States
- Language:
- English
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