It’s Still MUSH for the Energy Service Companies

Jan. 31, 2014
Business appears to be reviving for energy efficiency service companies after two years of a slow going, according to a report by Navigant Research. The report forecasts that the ESCO market will grow from $4.9 billion in 2013 to $8.3 billion by 2020.

After two years of a difficult market, business appears to be reviving for energy service companies (ESCOs), according to a report by Navigant Research.

Schools – from kindergarten through college – continue to be the prime source of contracts. Navigant forecasts schools will provide $22 billion in cumulative ESCO revenue from 2013 through 2020.

“The ESCO market continues to be concentrated in municipalities, universities, schools, and hospitals, known as the ‘MUSH’ market,” says Eric Bloom, senior research analyst with Navigant Research.  “K-12 schools, which present the largest opportunity for ESCOs, are designed to last for many decades, and many public school buildings in operation today are characterized by out-of-date HVAC, lighting, and control systems that could benefit considerably from system upgrades.”

ESCOs also continue to secure a lot of their business through the federal government, the report said.

Customer finances and unfavorable government policy slowed growth for ESCOs in recent years. However, a turnaround appears to be afoot, led in part by growing demand for renewable energy and distributed energy, according to the report. ESCOs are shifting their business models to accommodate these new market demands. Navigant forecasts that the US ESCO market will grow from $4.9 billion in 2013 to $8.3 billion by 2020.

More information is available here about the report, “The U.S. Energy Service Company Market.”

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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