Build Magazine July 2015

Build Magazine 33 In the United States, many cash-constrained institutional and government customers have been able to implement comprehensive energy efficiency building upgrades by entering into energy performance contracts (EPCs) with en- ergy service companies (ESCOs). These engagements lead to the installation a wide range of building improvements with no out-of-pocket expense for customers. Customers commit to a long-term agreement that pays back the cap- ital improvements with the energy savings from their utility bills made possible by the efficiency improvement projects. Building upgrades with no upfront costs sound like a great deal, so why isn’t everyone doing this? The classic business case for working with ESCOs centers on three specific benefits. First, ESCOs enable customers to integrate significant improvements in equipment and systems without upfront capital costs. Second, ESCOs bring the technical and engineering expertise to customers without the human capital to manage major energy efficiency improvements in-house. Finally, the comprehensive approach of ESCO projects generates long-term energy and operational improvements that enable customers to achieve energy efficiency and sustainability policy goals and man- dates. The kicker is that the contract terms and costs associated with the project management and technical ex- pertise are rolled into the projects. Many private-sector customers have much shorter-term requirements of 18 to 36 months rather than upwards of 10 years. In addition, in-house engineering and technical expertise can minimize some of the appeal of working with an ESCO. Navigant Research estimates that the U.S. ESCO market will grow from $6.3 billion in 2015 to $11.5 billion in 2024. In Europe, ESCO revenue is projected to grow from $2.7 billion to $3.1 billion over the same period. ESCO Revenue, United States and Europe: 2015-2024 (Source: Navigant Research) The U.S. Energy Service Company Market – Challenges and New Opportunities Eco Building By Casey Talon