Suffering U.S. energy service companies ESCOs poised for a comeback
October 7, 2013 - The energy service company (ESCO) market in the United States has gone through a difficult period in recent years, says new information from Navigant Research, adding that customers have grown “concerned about the impact of energy performance contracts on their financial positions”, and many of the resources such as policy measures that drove growth prior to 2011 have been exhausted.
By Anthony Capkun
As a result, ESCO market activity has slowed considerably but, according to a new report from Navigant, growth in the U.S. ESCO market is set to resume. Annual revenue for States-side ESCOs will grow from $4.9 billion in 2013 to almost $8.3 billion in 2020, the study concludes.
“Over the past two years, ESCOs have found it difficult to attract customers and convert backlog into revenue,” said Eric Bloom, senior research analyst with Navigant. “The difficulties imposed on key customer segments, such as municipalities, by weak economic conditions across the United States have constrained demand. Over the next 7 years, though, growth is expected to resume as energy efficiency measures take effect across a broad swath of the economy.”
The federal sector will undergo significant growth, says Navigant, thanks to a number of supportive measures, including the 2011 Better Buildings Initiative, which aims to provide $2 billion of energy performance contracts in the federal sector by the end of 2013. Other sectors, such as commercial and industrial firms and public housing, will also start to expand once broader economic conditions improve.