Review of U.S. ESCO industry market trends: An empirical analysis of project data
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:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- 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; R&D Project: 673163; TRN: US200515%%318
- Journal Information:
- Energy Policy Journal, Vol. 33, Issue 3; Other Information: Submitted to Energy Policy Journal: Volume 33, No.3; Journal Publication Date: Feb. 2005; PBD: 1 Mar 2003
- Country of Publication:
- United States
- Language:
- English
Similar Records
Evolution of the U.S. Energy Service Company Industry: Market Size and Project Performance from 1990-2008
Estimating customer electricity savings from projects installed by the U.S. ESCO industry