ESCO Challenges

3 Main Difficulties and Challenges for Energy Services Companies 2021

Once again this year, in the State of Energy Survey, we asked Energy Services Company (ESCO) professionals what their priorities and challenges are.

In an ever-changing industry, with volatile pricing and digitalisation processes, the challenges and opportunities are evolving fast. Maintaining savings, demonstrating ROI and securing budgets are three of them. 

Read on and join us for a closer look at the results. 

Report of energy management survey results 2021

After analysing the responses to the State of Energy Management Survey 2021, we found that almost a quarter of the participants (23.7%) work for Energy Service Companies (ESCOs).

Energy Survey Report Company Type

Top 3 Challenges for Energy Management Experts in 2021

We asked them what their main priorities and challenges are in the development of their activity.

This section generates interest and differences in each edition of the Survey, as the challenges can be very different depending on the situation of each company, its maturity and the competition in the market. Moreover, these and other factors put pressure on ESCOs to maintain their position in the industry.

Below we review the three issues that are of most concern to professionals in the energy services sector:

1. Generating and Sustaining Savings in Energy Efficiency Projects

Generating and maintaining verified savings is the main challenge for a large percentage of the professionals surveyed (44%). 

Analysing existing projects, verifying their savings, as well as forecasting savings for a project in the planning phase, can be an odyssey if you don’t have the right technology.

For this reason, most professionals in the sector rely on advanced Energy Management Solutions (EMS)

Many of these solutions already have functionalities that help energy managers calculate the Baseline of their projects, helping them to monitor and verify the savings being made. These types of tools also allow you to detect anomalies and create alerts to anticipate them, thus enabling you to carry out new energy saving measures that will put the project on track towards its final objective.

An example of this type of functionality is the DEXMA Platform’s Savings Measurement and Verification tool. This functionality allows energy management experts to have an aggregated view of how much money and CO2 emissions they are saving and to control their Energy Performance Contracts, among other functions. 

In the full report, you can find out more about the trend in the use of EMS among professionals in the section “Energy Management Software Usage and Preferences“.

2. Demonstrating the ROI of Energy Efficiency Actions

20% of ESCO professionals indicated that this was one of their biggest challenges. 

And no wonder, as calculating Return on Investment (ROI) is key in all industries to ensure that projects are implemented and funds are injected to ensure their continuity.

Even when companies are committed to their energy efficiency plans, analysing results and demonstrating their ROI is complex for many. 

If you want to calculate the ROI of your project quickly and easily, here is an Excel template to help you.

3. Securing the Budget for Energy Efficiency Projects

This would be the third most prominent challenge among energy service company professionals (18%).

Energy Service Companies know that it is not always easy to find a budget for energy efficiency and sustainability programmes. But don’t worry, because there are many options available both inside and outside your company, such as public support, third-party investment, self-financing… For more information, read this article or download this detailed guide.

In addition to these three challenges, other issues of concern to energy professionals are cost reduction in the current scenario of continuous price increases, as well as compliance with regulations and the search for new projects.

Energy Efficiency Professionals’ Priorities for 2022

Along with the main challenges, we also asked participants about their priorities for 2022. The top 3 answers from the energy services experts are:

  1. Close more and new projects
  2. Improving the efficiency of their current projects
  3. Invest in new technologies to improve their results

Top 3 Priorities Energy Manager ESCO

Considering that 42% of participants indicated that the number of projects has been reduced due to the impact of Covid-19 during 2021, it is more than logical that the top priority in 2022 is to close new energy efficiency projects. 

Many companies are looking to continue to grow their business by closing more projects and offering better services in the projects they have in place. This is also why the third point about investing in new technologies to improve results is directly related. 

Energy service companies want to work more and better. This list of priorities coincides with the answers obtained in previous surveys conducted by DEXMA. So there is no doubt that this trend will continue in 2022.

If you want to read the full report and access all the answers, download it for free here. And if you want to keep up to date with our articles, tips and reports, subscribe to our blog.