Guidehouse Research Estimates Market for Energy Service Companies' Performance Contracting to Reach Nearly $27 Billion by 2034

ESCO performance contracts gain traction as governments and businesses seek long-term energy savings and resilience

BOULDER, Colo., Aug. 14, 2025 /PRNewswire/ -- A new report from Guidehouse Research analyzes major trends in energy service companies (ESCO) performance contracting.

The energy savings performance contracts (ESPCs) offered by ESCOs can increase cost savings, energy efficiency, and infrastructure resilience across numerous customer segments. According to a new report from Guidehouse Research, the ESCO performance contracting market is expected to expand from $15.9 billion in 2025 to $26.7 billion in 2034, representing a CAGR of 6.0%.

ESPCs can directly benefit federal and municipal government buildings, hospitals, and education facilities. Other beneficiaries include private commercial and industrial (C&I) buildings, utilities, and military institutions.

"Both public and private entities are attracted to the cost savings, infrastructure upgrades, and increased energy efficiency and resilience that result from ESPCs," says Wendy Davis, principal research analyst with Guidehouse Research. "Other key drivers of ESPC use are corporate decarbonization goals, enabling legislation, building performance standards, utility-based programs, energy market participation incentives, and companies with excess capital."

Despite noticeable growth, the ESCO performance contracting market faces noteworthy barriers. Continued growth will depend on stakeholders addressing challenges by increasing awareness of the benefits of using ESPCs as a contracting mechanism. Key market barriers include political uncertainty, a shortage of skilled project managers and engineers, the availability of capital for private companies and the long ROI period for ESPCs, low energy prices in some regions, and diminishing opportunities to increase energy efficiency, according to the report.

The report, ESCO Performance Contracting, analyzes major trends across six customer segments: primary and secondary education, state and local government, federal or national government, higher education, healthcare and hospitals, and C&I. The report also covers six technologies utilized in ESPCs that help customers increase energy efficiency, cost savings, and infrastructure value: HVAC, lighting, building controls, water efficiency, onsite supply and renewables, and EV charging. The report provides an overview of the drivers and barriers for the ESCO performance contracting market and offers recommendations for ESPC stakeholders. An executive summary of the report is available for free download on the Guidehouse Research website.

About Guidehouse Research

Guidehouse Research, the dedicated market intelligence arm of Guidehouse, provides research, data, and benchmarking services for today's rapidly changing and highly regulated industries. Our insights are built on in-depth analysis of global clean technology markets. The team's research methodology combines supply-side industry analysis, end-user primary research, and demand assessment, paired with a deep examination of technology trends, to provide a comprehensive view of emerging resilient infrastructure systems. Additional information about Guidehouse Research can be found at guidehouseresearch.com.

About Guidehouse

Guidehouse is a global AI-led professional services firm delivering advisory, technology, and managed services to the commercial and government sectors. With an integrated business technology approach, Guidehouse drives efficiency and resilience in the healthcare, financial services, energy, infrastructure, and national security markets. Built to help clients across industries outwit complexity, the firm brings together approximately 18,000 professionals to achieve lasting impact and shape a meaningful future. guidehouse.com

* The information contained in this press release concerning the report, ESCO Performance Contracting, is a summary and reflects the current expectations of Guidehouse Research based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report's conclusions and the methodologies used to create the report. Neither Guidehouse Research nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.

For more information, contact:

Cecile Fradkin for Guidehouse Research
+1.646.941.9139
[email protected]

SOURCE Guidehouse Research