This report brings together various sources of evidence to describe the Energy Efficiency Services (EES) market and inform the development of quality criteria and the implementation of quality assurance schemes. It focusses on two common forms of EES; Energy Performance Contracting (EPC) and Energy Supply Contracting (ESC).

It is primarily based on an extensive survey of EES providers and facilitators, and interviews of clients and financial institutions involved with EES, but also incorporates relevant literature and the market knowledge of the authors. It compares results across 15 European countries captured in 2017 with previous surveys conducted in 2013 & 2015. Survey results can also be explored via our interactive web tool.

The report is one of the most in depth and focussed studies of European Energy Efficiency Services markets to date and key findings include:

• The development in the 15 European EPC markets covered was reported to have been positive in 2017: More than half of all respondents (53%) indicated that their national EPC market had seen growth over the last 12 months. These results are broadly similar to a survey carried out in 2015 by Transparense project where 57% of respondents reported growth.
• The public-sector drives EPC markets and the majority of EPC providers and facilitators (64%) report that their clients are most frequently municipalities.
• The most common EPC contract length is 5-10 years as reported by 55% of the respondents.
• The most significant barriers to EPC business revealed in the survey are; complexity of the concept / lack of information identified by 58% of the respondents followed by lack of trust in the ESCO industry identified by 53% of the respondents.
• The ‘energy savings guarantee’ was identified by 59% of respondents as the most significant driver for EPC. Other key drivers highlighted include ‘limited budgets in public sector’ and ‘pressure to reduce the costs’.
• The preliminary technical-economic analysis / energy audit was identified as the key quality determinant for EPC projects, and it was reported that quality improvement is required for this aspect as well as all other areas of project preparation and implementation considered
• Market growth in energy supply contracting (ESC) was reported to have been slower than for EPC in 2017. Both growth and stagnation were reported by about 45% of respondents each. When it comes to their own ESC orders, stagnation was the most common response selected by ESC providers and facilitators.
• Respondents agreed that increasing energy prices were a significant driver of ESC business. This implies energy supply contracts can benefit well from policies that bring external environmental costs into the price of energy.
• The areas of ESC projects which were reported to need the most attention in terms of quality are ‘preliminary technical-economic analysis / energy audit’ and ‘implementation of technical measures’.

Quality assurance schemes to increase client trust

The report reviews the current status of quality assurance for Energy Efficiency Services in the 15 European countries covered. In each case it is recommended that further action is required to develop and implement quality assurance schemes to overcome existing lack of trust in service providers and low customer demand.

The research also investigated the most desirable attributes of a quality assurance system preferred by market actors. While providers and facilitators and financial institutions clearly identified governmental/public institutions as being the most respected bodies to issue quality assurance certification for EES, the preference of clients is split between governmental/public institutions and associations of providers. The majority of EPC providers and facilitators agreed that the cost for quality assurance should be met by the client and viable fee for quality assurance would be up to 1% of the value of a particular project.

The expectations of potential impacts from a quality assurance scheme differ among the market actors. While the providers and facilitators primarily expect an increase in customer trust, clients and financial institutions primarily expect an increase in quality. All surveyed market groups indicated a strong preference to implementing projects subject to quality assurance.