It’s Still MUSH for the Energy Service Companies

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DouglasCountySchoolDistrict NRELAfter 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ESCOs, are designed to last for many decades, and many public school buildings in operation today are characterized by out-of-date HVAC, lighting, and control systems that could benefit considerably from system upgrades.”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.”

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. ” . The market peaked at $5.6 billion in 2011, supported in large part by the short-term effects of the American Recovery and Reinvestment Act. However, the exhaustion of those resources contributed to the sharp decline in energy service company revenue in 2012, when total revenue fell to $4.8 billion, a figure that is below 2010 levels” This in my opinion can be construed as a pipeline philosophy . The numbers are not always based in “real time’ Today projects launch at more than the snails pace of 2010 ( which is indicative of the 2011-12 portfolio . Creative funding programs such as PACE and efforts by the Environmental Defense Funds Investors Confidence Program (ICP) will fill the pipeline , and bring forth results for the 2016 presidential election fodder

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