BOULDER, Colo. — The United States energy service company (ESCO) market is expected grow from $6.3 billion in 2015 to $11.5 billion in 2024, while ESCO revenue in Europe is projected to grow from $2.7 billion to $3.1 billion, according to a report from Navigant Research.

The ESCO industry in the U.S. follows a modest revenue growth trajectory generated by the business of implementing comprehensive facility upgrades, says Navigant Research. There is a foundation of ESCO work in the public sector that is supported by policy and economic drivers. The challenge for the industry, however, is to attain more aggressive growth in this mature marketplace. Long-term market expansion is expected to arise from new business in the private sector and through the development of opportunities in markets outside of the United States.

The private sector represents a significant volume of market potential for ESCOs. A new wave of companies is opening the door to commercial sector energy efficiency with business models that help private sector customers overcome the upfront capital hurdle to investment. Meanwhile, Europe is expected to be the first key international market for the largest U.S. ESCOs. Although ESCOs have faced obstacles in developing markets outside the United States, a tipping point is nearing and momentum is expected in the mid- and long-term.

The report assesses the ESCO market for energy savings performance contracts. These projects include retrofits for HVAC and mechanical systems, building automation systems (BAS), building energy management systems (BEMS), renewables, lighting, and water conservation. The report details the current state of the ESCO market and provides insight into its future direction based on customer demand, government policies, and other market dynamics. The forecast for the U.S. ESCO market extends through 2024. The report also provides a forecast through 2024 for ESCO revenue in Europe, with a focus on Germany, France, and the United Kingdom.

An executive summary of the report is available here.

Publication date: 6/8/2015