In a recent report, the Lawrence Berkley Labs evaluated trends in the U.S. energy services company (ESCO) industry. The study indicated that the ESCO industry is well positioned for growth. From 1990 to 2000 the industry’s annual revenue growth rate averaged 20%. However from 2001 to 2003 revenue growth declined to a 3% annual rate. Retail competition, industry consolidation and limitation on federal sector use of energy performance contacting were cited as key factors in the decline. Growth picked up again in the 2004-06 period with revenue growth rates in the 22% range. The study cited rising energy prices, growing interest in energy efficiency and climate change as some reasons for the renewed revenue growth. The largest segment (58%) was with state/local government, universities, schools and hospital markets. The federal government was also a major participant at 22%. The commercial and industrial sectors were at 20%. The multifamily residential sector was cited as a minor participant in ESCO activities: only 5% of revenues were attributed to multifamily activities. However the public housing agency segment dominates the multifamily sector with a 40% market share.

Check out the report (http://eetd.lbl.gov/EA/EMP/reports/62679.pdf), to better understand the competitive forces that are impacting ESCOs and an assessment of their future role in delivering energy efficiency and related energy services to their customers including public housing agencies.