Abstract
The U.S. ESCO market is viable and growing due to a number of driving factors.
Government pushes on energy conservation and efficiency have spurred end-users
into action and has resulted in solid market growth. There is an increased
awareness among end-users regarding the necessity of energy services as energy
prices soar and infrastructures are beginning to age. This market growth
comes despite an industry shakeup involving vast consolidation and divestment
throughout the industry, and a temporary suspension of performance
contracting. Re-authorization of performance contracting and advancements in
technology are also projected to help maintain industry stability for the next
7 years.
Though general market stability is projected, there are still some significant
obstacles and challenges that are restraining further industry growth. ESCOs
continue to struggle to break into the commercial and industrial markets,
which hold enormous growth potential. ESCOs are dealing with C&I end-users
who hesitate to enter into long-term contracts that have a generally slow
return on investment. Although end-users are becoming more aware of the
necessity of energy services, there is still a large percentage of potential
customers that are uneducated. There is also a lingering hesitation among
end-users to employ energy services in light of the Enron and related
scandals. Despite these challenges, however, ESCOs are implementing
innovative growth strategies and reporting record growth.
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