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Mountain View, CA, United States, 2009/06/19 - Favorable energy codes and regulations that encourage the construction of energy-efficient buildings have created opportunity for performance contracting companies to showcase their technological competence.
They have been incorporating light-emitting diodes (LEDs), renewables, and building automation systems (BASs) to stay competitive. These novel technologies help them address end-user concerns about rising electricity bills and preferences to go green.
The following are findings from the analysis:
• The market earned revenues of $3.45 billion in 2008 and estimates this to reach $4.68 billion in 2015 due to the strong support from the federal government and increasing concerns about energy efficiency.
• Despite the backing of the government, market participants must strategize to deal with the slump in sales due to strained economic conditions, saturation of the municipal utilities schools hospitals (MUSH) markets, and the restricted penetration in the private sector markets.
• Credit issues and lengthy sales cycles involved in contracts make it difficult for companies to penetrate the commercial and industrial sectors. The market is also battling a shortage of energy professionals and is challenged to handle unmet end-user expectations.
• Companies look to tide over the difficult phase by enhancing core competencies in manufacturing and design communities, as well as increase market share through consolidations. The government is also doing its bit to alleviate the issue of inadequate staff by introducing numerous energy efficiency courses in schools and universities to bring in more qualified energy professionals into the industry.
• Apart from the proactive measures from the market and government, participants will also feel heartened by the ever-increasing fuel prices, volatility in energy costs, and environmental awareness, which are compelling building owners to consider more economical options for reducing fuel dependence.
From Frost & Sullivan Research Analyst Soundarya G:
"Aid from the federal sector is not limited to laws and regulations alone, but extends to business orders as well," states Soundarya "So far, only 20 percent of the federal market has been exploited, leaving a huge untapped market that draws the attention of performance contracting companies."
"Building owners realize that a sophisticated technology that optimizes solutions is likely to reduce their energy bills significantly," continues Soundarya. "Performance contracting has also found favor with end users due to its approach of low up-front cost and flexibility to pay back from the savings achieved."
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