Given that new EU resources must ensure EU economic recovery while aligning investment with the objectives of the European Green Deal, now is the time to ensure short-term measures are put in place to facilitate immediate action, as well as long-term energy savings. Energy service companies (ESCOs) can play a key role in providing energy savings solutions to be paid back over long-term energy performance contracts (EnPCs). This paper provides an overview of the barriers to and opportunities for market growth in ESCOs and recommendations on how policymakers can expedite growth of Energy Services in Europe.
Energy service companies (ESCOs) can play a key role in providing energy savings solutions to be paid back over long-term energy performance contracts (EnPCs). For example, when Member States set their investment and recovery priorities through their national Recovery and Resilience Plans, they should ensure they allocate financing for developing the national energy service market as a way to deliver building renovations, including for addressing challenging markets, such as the renovation of the public building sector.
In this paper, we provide an overview of the ESCO market in Europe, followed by concrete policy recommendations to expedite the growth of the ESCO marekt in Europe. We argue that the European Commission’s Renovation Wave initiative for buildings, expected for October 2020, should put an accent on the importance of EnPCs as a key tool to deliver the necessary renovations, starting from the need to implement existing provisions across different legislation (i.e. the Energy Efficiency Directive); the Renovation Wave should also provide an assessment of eventual gaps and opportunities to mainstream EnPCs further, including support for local authorities such as specific technical assistance to aggregate residential renovations through EnPCs.