Appendix A

Important assumptions

In interpreting our estimates of electricity savings from ESCO projects, it is important to be cognizant of several key assumptions made in our analysis. Table A-1 summarizes these factors and their potential effect on our estimates of annual incremental electricity savings and electricity savings from ESCO projects active in a given year.

Table A.1. Key assumptions and their potential effect on electricity savings estimates

Key assumption / Effect on electricity savings estimates
We assumed that larger ESCOs provide representative sample of projects for the LBNL/NAESCO database with typical savings and costs. / In the NAESCO accreditation process, ESCOs are asked to provide a representative sample of projects (geographically and size of projects). LBNL cannot rule out the potential for selection bias. Reported savings levels for projects in the LBNL database may be higher compared to the population of all ESCO projects completed in the past 10 years.
We assumed that ESCO project savings are maintained over their useful lifetime (even after performance contract has ended). / Useful lifetime of measures installed in ESCO projects exceed the contract term in many projects (e.g., ~60% of projects in the 2003-2012 period had longer lifetimes than contract lengths). Estimates of electricity savings for projects active in a given yearwill be somewhat lower if savings do not continue after the contract term ends.
We assumed that first-year savings from performance contracts are maintained over the contract term, because of the guaranteed savings provision within an ESPC. / Under ESPCs, ESCOs are obligated to achieve guaranteed savings. Actual, reported savings often exceed guaranteed savings, but are not a contractual commitment. Estimates of electricity savings for projects active in a given year may be somewhat lower if ESCO projects only achieve guaranteed savings in later years.
We assume that savings from projects that declare utilizing customer-funded energy efficiency programs are not part of U.S. ESCO industry savings. / A small portion of project investment costs are covered by customer-funded EE incentives (see Section 3.1 in the manuscript), while the remaining portion covered directly by the ESCO. An attributional mechanism could assign part of the savings from these projects to ESCOs. This assumption may lead to higher electricity savings estimates for MUSH projects that reported not utilizing customer-funded EE program incentives.

Appendix B

Energy savings results tables

The tables in this appendix include incremental (B.1, B.2, and B.3) and active project (B.4, B.5, and B.6) total energy savings for the U.S. ESCO industry, the MUSH market, and projects in this market that did not utilize customer-funded energy efficiency programs.

Table B.1. Annual incremental energy savings: U.S. ESCO industry

LBNL/NAESCO Database / U.S. ESCO Industry
Project Implementation Year / # of projects / Energy savings[MMBtu] / Project installation cost[million $2012] / % of U.S. ESCO industry by revenue / Estimated energy savings
[million MMBtu]
2010 / 146 / 1,702,364 / 487.4 / 9.6% / 17.8
2011 / 167 / 1,506,382 / 634.2 / 11.9% / 12.7
2012 / 148 / 1,562,108 / 601.1 / 10.1% / 15.5
2003-2012 / 1535 / 18,128,506 / 5,062.2 / 11.4% / 158.8

Table B.2. Annual incremental energy savings: ESCO projects in the MUSH market.

LBNL/NAESCO Database / U.S. ESCO Industry
Project implementation year / # of projects / Energy savings / Project installation cost / MUSH market share of total ESCO market (by cost) / Energy savings for MUSH market
[MMBtu] / [million $2012] / [million MMBtu]
2010 / 125 / 1,332,046 / 419.7 / 86% / 13.9
2011 / 133 / 1,101,598 / 480.8 / 76% / 9.3
2012 / 133 / 1,267,649 / 472.0 / 79% / 12.6
2003-2012 / 1229 / 13,185,386 / 4,054.0 / 80% / 115.5

Table B.3. Annual incremental energy savings: ESCO projects in the MUSH market that did not utilize customer-funded EE programs.

LBNL/NAESCO Database / U.S. ESCO Industry
Project implementation year / # of projects / Energy savings [MMBtu] / Project installation cost / % of MUSH market projects that did not utilize utility EE programs / Energy savings for MUSH customers that did not utilize utility EE programs
[million $2012] / [million MMBtu]
2010 / 75 / 947,024 / 272.6 / 60% / 9.9
2011 / 67 / 409,922 / 178.7 / 50% / 3.4
2012 / 60 / 648,595 / 208.5 / 45% / 6.4
2003-2012 / 791 / 8,096,758 / 2,562.7 / 64% / 70.9

Table B.4. Estimated energy savings from ESCO projects active in recent years: U.S. ESCO industry

LBNL/NAESCO Database / U.S. ESCO Industry
Year / # of active projects / Energy savings / Project installation cost [million $2012] / % of U.S. ESCO industry / Energy savings
[million MMBtu]
[MMBtu]
2010 / 1898 / 22,508,563 / 5,300.50 / 10.2% / 220.3
2011 / 1986 / 23,116,667 / 5,799.41 / 10.5% / 219.8
2012 / 2025 / 23,545,833 / 6,196.00 / 10.5% / 223.7

Table B.5. Estimated energy savings from ESCO projects activein recent years: MUSH market

LBNL/NAESCO Database / U.S. ESCO Industry
Year / # of active projects / Energy savings / Project installation cost / MUSH market share of total ESCO market (by cost) / Energy savings for MUSH market
[MMBtu] / [million $2012] / [million MMBtu]
2010 / 1457 / 15,942,770 / 4,205.93 / 79% / 156.0
2011 / 1535 / 16,348,369 / 4,578.23 / 79% / 155.4
2012 / 1584 / 16,722,159 / 4,882.47 / 79% / 158.9

Table B.6. Estimated energy savings from ESCO projects active in recent years: MUSH market projects that did not utilize customer-funded EE programs

LBNL/NAESCO Database / U.S. ESCO Industry
Year / # of active projects / Energy savings [MMBtu] / Project installation cost / % of MUSH projects that did not utilize utility EE programs / Energy savings for MUSH market customers that did not utilize utility EE programs
[million $2012] / [million MMBtu]
2010 / 988 / 10,413,103 / 2,894.46 / 68% / 101.9
2011 / 1024 / 10,394,934 / 3,007.76 / 67% / 98.8
2012 / 1037 / 10,561,852 / 3,132.20 / 65% / 100.4