HVAC Breaking News / News

July 23, 2012: Consolidation Among U.S. Energy Service Companies to Continue

BOULDER, Colo. — Consolidation in the energy service company (ESCO) market is expected to continue through the remainder of this decade, as highly competitive players aim to increase market share, resulting in an industry structure concentrated to a large extent in a group of very large companies focused on serving the federal government, according to a new report from Pike Research.

The ESCO market, which is comprised of companies that provide end-to-end efficiency measures through the use of performance contracts, exceeded $5 billion in revenues in 2011, noted Pike Research. Driven by public policies that encourage greater emphasis on energy efficiency, this market is forecast to grow faster than the domestic economy and reach at least $13 billion in sales by 2020.

“In some respects, the rapid rise of mergers and acquisitions in the ESCO industry over the past decade is similar to the intense consolidation of many smaller electric and gas utilities at the start of the 20th century,” said research analyst Brittany Gibson. “However, the utility mergers generally resulted in the creation of mid-to-large territorial monopolies, sanctioned and institutionalized by a regulatory structure meant to protect the public interest. In contrast, the consolidation of ESCOs has resulted in an unregulated but highly structured tier of companies pursuing business in national or regional markets.”

At the very top of this tier are the 16 ESCOs selected by the U.S. Department of Energy (DOE) for special consideration in contracting through the use of energy savings performance contracts (ESPCs). These ESCOs include Honeywell, Johnson Controls, McKinstry, NORESCO (a subsidiary of Carrier Corp.), Schneider Electric, Siemens, and Trane. Of particular importance for these top ESCOs is the 2009 executive order issued by President Obama that mandates that all federal agencies must achieve a 30 percent reduction in energy use by 2015.

While a select few utility affiliates remain among the largest ESCOs, Pike Research said that perhaps the biggest change in terms of the ESCO competitive landscape has been the rapid disappearance of many utility-affiliated companies.

Publication date: 7/23/2012

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

2014 ACI Home Performance Conference

The 2014 ACI National Home Performance Conference & Trade Show was held in Detroit.

Podcasts

NEWSMakers: Michael Willburn

Michael Willburn, president, Infloor Heating Systems, joins the program to discuss his company, radiant heating, industry trends, and whether contractors are becoming more interested in radiant heating. Posted on July 11.

More Podcasts

ACHRNEWS

NEWS 07-21-14 cover

2014 July 21

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

R-22 PHASEOUT POLL

Some in the industry are calling for the EPA to halt production of R-22 as of 2015. What do you think?
View Results Poll Archive

HVACR INDUSTRY STORE

plumbing-hvac.gif
2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

 

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

DON'T MISS A THING

Magazine image
 
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

STAY CONNECTED

facebook icontwitter iconyoutube iconLinkedIn i con