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A method to estimate the size and remaining market potential of the U.S. ESCO (energy service company) industry


  • Stuart, Elizabeth
  • Larsen, Peter H.
  • Goldman, Charles A.
  • Gilligan, Donald


This study presents a method to estimate the market investment potential for ESPC (energy-saving performance contracts) and annual blended energy savings remaining in buildings typically addressed by U.S. ESCOs (energy service companies). We define ESCOs as companies for whom performance-based contracting is a core business activity. The market potential analysis incorporates market penetration estimates provided by industry experts in late 2012, data on U.S. building stock typically addressed by ESCOs, and typical project investment costs from a database of 4000 + projects. ESCO industry revenue growth significantly outpaced U.S. GDP (gross domestic product) growth during 2009–2011. We estimate that the remaining investment potential in facilities typically addressed by the ESCO industry ranges from ∼$71 to $133 billion. Our analysis includes ESCO industry size and growth projections drawing on information from interviews with ESCO executives conducted in late 2012. The U.S. ESCO industry could grow in size from $6 billion in 2013 to ∼$7.5 billion by 2014, but this growth is contingent on enabling policies. The U.S. ESCO industry is similar in size to the ESCO industries in Germany, France, and China. Our estimation approach could be adapted for other countries with the caveat that ESCO industry definitions and revenue reporting practices vary across countries.

Suggested Citation

  • Stuart, Elizabeth & Larsen, Peter H. & Goldman, Charles A. & Gilligan, Donald, 2014. "A method to estimate the size and remaining market potential of the U.S. ESCO (energy service company) industry," Energy, Elsevier, vol. 77(C), pages 362-371.
  • Handle: RePEc:eee:energy:v:77:y:2014:i:c:p:362-371
    DOI: 10.1016/

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    References listed on IDEAS

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    Cited by:

    1. Carvallo, Juan Pablo & Murphy, Sean P. & Stuart, Elizabeth & Larsen, Peter H. & Goldman, Charles, 2019. "Evaluating project level investment trends for the U.S. ESCO industry: 1990–2017," Energy Policy, Elsevier, vol. 130(C), pages 139-161.
    2. Wenjie Zhang & Hongping Yuan, 2019. "Promoting Energy Performance Contracting for Achieving Urban Sustainability: What is the Research Trend?," Energies, MDPI, Open Access Journal, vol. 12(8), pages 1-18, April.
    3. Bustos, F. & Lazo, C. & Contreras, J. & Fuentes, A., 2016. "Analysis of a solar and aerothermal plant combined with a conventional system in an ESCO model in Chile," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1156-1167.
    4. Weisheng Deng & Lu Liu, 2019. "Comparison of Carbon Emission Reduction Modes: Impacts of Capital Constraint and Risk Aversion," Sustainability, MDPI, Open Access Journal, vol. 11(6), pages 1-30, March.
    5. Shang, Tiancheng & Zhang, Kai & Liu, Peihong & Chen, Ziwei & Li, Xiangpeng & Wu, Xue, 2015. "What to allocate and how to allocate?—Benefit allocation in Shared Savings Energy Performance Contracting Projects," Energy, Elsevier, vol. 91(C), pages 60-71.
    6. Luis Hernández-Callejo, 2019. "A Comprehensive Review of Operation and Control, Maintenance and Lifespan Management, Grid Planning and Design, and Metering in Smart Grids," Energies, MDPI, Open Access Journal, vol. 12(9), pages 1-50, April.
    7. Deng, Qianli & Jiang, Xianglin & Zhang, Limao & Cui, Qingbin, 2015. "Making optimal investment decisions for energy service companies under uncertainty: A case study," Energy, Elsevier, vol. 88(C), pages 234-243.
    8. Bertoldi, Paolo & Boza-Kiss, Benigna, 2017. "Analysis of barriers and drivers for the development of the ESCO markets in Europe," Energy Policy, Elsevier, vol. 107(C), pages 345-355.
    9. Hyein Yi & Sanghyo Lee & Jaejun Kim, 2017. "An ESCO Business Model Using CER for Buildings’ Energy Retrofit," Sustainability, MDPI, Open Access Journal, vol. 9(4), pages 1-21, April.
    10. Wenjie Zhang & Hongping Yuan, 2019. "A Bibliometric Analysis of Energy Performance Contracting Research from 2008 to 2018," Sustainability, MDPI, Open Access Journal, vol. 11(13), pages 1-23, June.
    11. Beccali, Marco & Bonomolo, Marina & Ciulla, Giuseppina & Galatioto, Alessandra & Lo Brano, Valerio, 2015. "Improvement of energy efficiency and quality of street lighting in South Italy as an action of Sustainable Energy Action Plans. The case study of Comiso (RG)," Energy, Elsevier, vol. 92(P3), pages 394-408.


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