An Introduction to the Energy Services Industry

Abstract

In the late 1970s, a small company in Texas was marketing one of the many devices that had been developed as a response to the decade's dramatic rise in energy costs. In essence, the device automated the task of turning lights and similar equipment on and off at appropriate times to save energy-a time clock. The concept was simple; the savings were compelling. In spite of the obvious savings, marketing the device was difficult because many simply doubted that the savings would actually be realized. As an innovative approach to selling the device, the president of the company began to make a different kind of offer to prospective customers. Instead of asking them to pay for the time clock up front, he asked instead that they simply give him a percentage of the measured savings achieved. Suddenly, sales accelerated and, the company that had had difficulty selling the device for $1,000 had no trouble at all persuading people to commit to pay cash amounts which were worth five times that much. Such was one of the early experiences in the energy performance contracting or energy services (ESCO) industry in the United States. Time Energy went on to achieve rapid and spectacular growth, but like many young companies in an emerging field, declined almost as precipitously shortly after going public. The ESCO industry has grown slowly and in fits and starts since the late 1970s. Early entrants were small entrepreneurial companies, either small independent companies or small divisions of large energy companies. Today the industry has grown to approximately $2.5 billion per year and seems to have reached a critical size, as more and more electric utilities and other energy giants are joining the field. Les societes de services energetiques proposent des services d'efficacite energetique integre, qui vont de l'identification des besoins, a la conception du projet, a sa realisation, a son fonctionnement et au monitorage de ses performances. Ces services ne sont pas payes directement par le client mais par les economies generees a l'issue du projet. Le developpement de ce type de service est analyse, aux Etats Unis, ainsi que les obstacles rencontres.