Energy Service Performance Contracting in Construction: A Review of the Literature

Building-related energy consumption accounts for about 40% of total energy consumption in the United States. Thus, energy efficiency of the building sector plays a vital role in reducing energy consumption. To aid in the process of energy efficiency improvement, a large private sector energy efficiency service industry has developed in the United States, over the last two decades. The most commonly used contracting method adopted by these companies is Energy Service Performance Contracting. Analysis of the market trend of energy performance contracting reveals that this type of contracting is not commonly employed in the private sector, despite its growing success in the public sector and escalating energy consumption in private building sector. This paper reviews available literature to identify and summarize the major barriers preventing wide spread use of energy performance contracting in the private building sector. The barriers have been classified under four categories: market, institutional, financial, and technology barriers. Finally, this paper concludes that barriers in the private building sector are mainly market and financial barriers.