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1017065

The North American Energy Service Company (ESCO) Market Report

Published: | Atlas Energy Intelligence, Inc. | 61 Pages | Delivery time: 1-2 business days

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The North American Energy Service Company (ESCO) Market Report
Published: June 1, 2021
Atlas Energy Intelligence, Inc.
Content info: 61 Pages
Delivery time: 1-2 business days
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  • Description
  • Table of Contents
Description

Executive Summary

As large energy users face new challenges and opportunities presented by the energy transition, they are increasingly enlisting the help of qualified energy solutions partners to transform the way they approach energy infrastructure. With an intensified focus on managing energy costs, reducing carbon emissions, and boosting resiliency in order to maintain smooth operations through major weather events and grid outages, large organizations are finding that energy service companies (ESCOs), which deliver comprehensive energy solutions through energy savings performance contracts (ESPCs) and other contracting vehicles, can address many of their key objectives around energy through self-funding, budget-neutral means.

ESCOs have delivered comprehensive energy projects for a wide range of large energy users in North America since the 1970s, using the energy savings achieved through energy efficiency retrofits to finance the capital costs of the project. In recent years, many ESCOs have expanded the model to include technologies such as solar PV, energy storage, LED streetlight retrofits, water advanced metering infrastructure (AMI) replacements, and others that enable large energy users to reduce costs and improve outcomes around sustainability and reliability. In the future, ESCOs will likely play an important role in developing clean energy infrastructure as pressure mounts on government agencies to take action on climate change and support economic rebuilding efforts in the wake of the COVID-19 pandemic.

The competitive landscape in the North American ESCO market is concentrated in about ten players who collectively represent over 70% of the market. Companies such as Ameresco, Johnson Controls, NORESCO, Siemens, Energy Systems Group (ESG), and Honeywell have a national presence in the U.S. across a wide range of sectors including the federal government, the municipal, university, schools, and healthcare (MUSH) sector, and others. As energy and infrastructure projects become more complex, involving integration of diverse energy technologies and grid-responsive solutions, the ESCOs with deep expertise in the market and the ability to scale to address diverse customer challenges will be best positioned for growth going forward.

Figure 1: North American ESCO Market by Country, 2021-2027

                                                                                    Source: Atlas Energy Intelligence

Atlas Energy Intelligence's analysis indicates that the North American ESCO market will grow from $4.9 billion in 2021 to $6.5 billion in 2027 at a CAGR of 4.8%. Growth will be driven by continued investment in energy infrastructure across all customer sectors in both the United States and Canada.

Table of Contents

Table of Contents

1. Executive Summary

2. Introduction

  • 2.1. Background and Context for the North American ESCO Market
  • 2.2. Defining the ESCO Market
  • 2.3. Key Trends & Drivers in the North American ESCO Market
    • 2.3.1. COVID-19 and the Near- and Long-Term Market Impacts
    • 2.3.2. Decarbonization Initiatives
    • 2.3.3. Customer Priorities around Resiliency
    • 2.3.4. Energy Master Planning and Comprehensive Infrastructure Investment
    • 2.3.5. Outsourcing of Facility and Infrastructure Management
    • 2.3.6. Electricity Market Reforms that Enable Distributed Energy Resources
    • 2.3.7. Energy Price Volatility
  • 2.4. Barriers in the North American ESCO Market
    • 2.4.1. ESPC Liabilities Maintained On-Balance Sheet
    • 2.4.2. Lack of Clarity in Government Programs Supporting ESPCs
  • 2.5. U.S. ESCO Market Overview
    • 2.5.1. MUSH Market
    • 2.5.2. U.S. Federal Sector
    • 2.5.3. Public Housing
    • 2.5.4. Commercial & Industrial Customers
    • 2.5.5. Trade Associations in the U.S. ESCO Market
  • 2.6. Canadian ESCO Market Overview
    • 2.6.1. MUSH Market
    • 2.6.2. The Canadian Federal Sector

3. Technology Issues & Business Models

  • 3.1. Technology Overview
    • 3.1.1. HVAC Technologies
    • 3.1.2. Lighting Technologies
    • 3.1.3. Control Systems & Building Energy Management Systems (BEMS)
    • 3.1.4. Building Envelope
  • 3.2. Renewable Energy Systems
    • 3.2.1. Solar PV
    • 3.2.2. Other Renewable Energy Systems
  • 3.3. Distributed Energy Infrastructure
    • 3.3.1. Energy Storage
    • 3.3.2. Combined Heat-and-Power (CHP)
    • 3.3.3. Microgrid-Enabling Technologies
  • 3.4. Other Technologies
    • 3.4.1. LED Streetlight Retrofits
    • 3.4.2. Wastewater Treatment Plants & Anaerobic Digesters
    • 3.4.3. Water Utility Advanced Metering Infrastructure (AMI) Retrofits
    • 3.4.4. Future Expansions into Green Fuels
    • 3.4.5. Non-Energy Measures
  • 3.5. ESCO Financing Structures
    • 3.5.1. Energy Savings Performance Contracts (ESPCs)
    • 3.5.2. Power Purchase Agreements (PPAs)
    • 3.5.3. Design-Build
    • 3.5.4. Energy Services Agreements (ESAs)
    • 3.5.5. Securing Financing for ESCO Projects
    • 3.5.6. P3 Contracts and Energy-as-a-Service (Eaas)
    • 3.5.7. Property Assessed Clean Energy (PACE) Financing

4. Competitive Landscape

  • 4.1. The U.S. ESCO Competitive Landscape
  • 4.2. The Canadian ESCO Competitive Landscape
  • 4.3. Mergers & Acquisitions in the ESCO Market
  • 4.4. ESCO Market Ecosystem
    • 4.4.1. Engineering/Construction Subcontractors
    • 4.4.2. ESCO Consultants & Buyer's Agents
    • 4.4.3. Commercial Financial Institutions
  • 4.5. ESCO Company Profiles
    • 4.5.1. Ameresco
    • 4.5.2. ConEdison Solutions
    • 4.5.3. Constellation NewEnergy
    • 4.5.4. Ecosystem
    • 4.5.5. ENGIE Services U.S.
    • 4.5.6. Energy Systems Group (ESG)
    • 4.5.7. Honeywell
    • 4.5.8. Johnson Controls
    • 4.5.9. McKinstry
    • 4.5.10. MCW Group
    • 4.5.11. NORESCO
    • 4.5.12. Schneider Electric
    • 4.5.13. Siemens
    • 4.5.14. Trane
  • 4.6. Other Key Players
    • 4.6.1. PowerSecure
  • 4.7. Hannon Armstrong Sustainable Infrastructure

5. Market Forecast & Analysis

  • 5.1. Quantifying the North American ESCO Market
    • 5.1.1. Energy Savings Performance Contracts (ESPCs)
    • 5.1.2. Design-Build
    • 5.1.3. Operations & Management (O&M) Services
  • 5.2. Customer Segmentation
    • 5.2.1. Federal
    • 5.2.2. State/Provincial/Local
    • 5.2.3. K-12 Schools
    • 5.2.4. Higher Education
    • 5.2.5. Healthcare
    • 5.2.6. Public Housing
    • 5.2.7. Commercial & Industrial
  • 5.3. Forecast Methodology
    • 5.3.1. Primary Research Inputs
    • 5.3.2. Secondary Research Inputs
  • 5.4. U.S. ESCO Market Forecast
  • 5.5. Canadian ESCO Market Forecast

Table of Figures

  • Figure 1: North American ESCO Market by Country, 2021-2027
  • Figure 2: DOE IDIQ ESPC Awards by ESCO, 2018-Present
  • Figure 3: List of DOE IDIQ ESPC Energy Services Companies (Third Generation)
  • Figure 4: Annual DOE IDIQ ESPC Awards by ESCO, 2016-Present
  • Figure 5: Energy Efficiency and Renewable Energy Policies for Federal Agencies
  • Figure 6: List of Qualified ESCOs for Canadian Federal ESPC Projects
  • Figure 7: Commercial Building Sector Lighting Stock, U.S., 2017-2035
  • Figure 8: Representation of ESPC Project Costs & Savings
  • Figure 9: Canada Infrastructure Bank Financial Structure & Facilities
  • Figure 10: U.S. ESCO Competitive Landscape
  • Figure 11: Estimated ESCO Market Share by Revenue, U.S., 2020-2022
  • Figure 12: Acquisitions & Investments in the ESCO and Adjacent Sectors
  • Figure 13: Estimated ESCO Market Share by Revenue, U.S., 2020-2022
  • Figure 14: U.S. ESCO Market Revenue by Customer Type, 2021-2027
  • Figure 15: U.S. ESCO Market Revenue by Service Type, 2021-2027
  • Figure 16: Canadian ESCO Market Revenue by Customer Type, 2021-2027
  • Figure 17: Canadian ESCO Market Revenue by Service Type, 2021-2027