MUSH market to drive ESCOs through 2020

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The U.S. energy service company (ESCO) market has experienced slow growth over the last two years, but is expected to rebound, resuming its expansion in primary markets including K-12 schools, state and local governments, universities and colleges, and hospitals, according to Navigant Research. In fact, education - combining K-12 and universities/colleges - will be the largest market segment for ESCOs, representing more than $22 billion in cumulative revenue from 2013 through 2020, Navigant forecasts.

Credit: Discol/Wikimedia Commons

Credit: Discol/Wikimedia Commons

"The ESCO market continues to be concentrated in municipalities, universities, schools, and hospitals, known as the 'MUSH' market," said Eric Bloom, senior research analyst with Navigant Research. "K-12 schools, which present the largest opportunity for ESCOs, are designed to last for many decades, and many public school buildings in operation today are characterized by out-of-date HVAC, lighting, and control systems that could benefit considerably from system upgrades."

For facility managers, school boards, mayors' offices, and other K-12 stakeholders, energy is rarely the chief concern with other priorities, such as teacher salaries and curriculum development, commanding more attention than energy-related matters. As a result, many ESCOs find that success in the K-12 sector involves the ability to address a wide range of concerns that go beyond energy in facilities, such as replacing roofs and facades and upgrading interior furnishings, according to the report.

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