Environmental Leader

In 2008, the energy management services market in North America earned revenues of $20.35 billion, but this could double by 2013 due to favorable government legislation and increasing awareness about the benefits of energy management, according to new analysis from consulting firm Frost & Sullivan.

Energy savings performance contracts (ESPC) have played a pivotal role in increasing the adoption levels of energy management. As there is no upfront investment from the customer and repayment can be made from the savings generated, the long payback period is expected to stop being a burden on end- users of the service.

“Energy savings performance contracts went through a rough phase in 2003, when the federal energy savings performance contract legislation of the Energy Policy Act disallowed the federal government to use private financing for energy efficiency measures,” notes Sivapriya Ramakrishnan, a Frost & Sullivan research analyst. “ESPCs resurfaced when the mandate was reauthorized a year later and regained its popularity.”

The popularity of ESPCs is evident by its large-scale adoption – particularly in the federal, institutional and commercial and industrial segments, according to the study.

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