Dive Brief:
- The market for energy service companies (ESCOs) will reach $11.5 billion in 2024, up from $6.3 billion this year, according to analysis from Navigant.
- The growth is being driven by the demand for energy efficiency retrofits and building improvements, as customers are forced to comply with new carbon policies and reliability standards.
- The largest energy service companies are also expected to find opportunities in Europe, where the market has traditionally lagged.
Dive Insight:
Energy service companies and performance contracting organizations are poised for growth in the next 10 years, according to a new report from Navigant, fueled by environmental policies, risks associated with reliability, and the need for businesses to reduce costs. And while ESCOs have had a hard time gaining traction across the Atlantic, the analysis finds a "tipping point" is nearing and the largest U.S. companies will find opportunities in Europe.
Navigant said it expects ESCO revenues in Europe to reach $3.1 billion, a slow rise from $2.7 billion.
“In facing long-term business planning, ESCOs are challenged to grow their business in this mature marketplace, which has been dominated by business in the public and institutional segments,” Casey Talon, senior research analyst with Navigant Research, said in a statement. “The evolution of this market is contingent on the continued support and development of the traditional customer base, but also the repositioning of offerings to appeal to a broader audience, namely in the private sector and Europe.”
According to the Lawrence Berkeley National Laboratory, U.S. ESCOs had revenue of $5.3 billion in 2011, with more than 80% of that coming from energy efficiency services.
