Switching on ESCOs: Barriers, challenges and opportunities for the development of Australia's ESCO market

Trianni, A; Leak, J; Hasan, ASMM

Switching on ESCOs: Barriers, challenges and opportunities for the development of Australia's ESCO market

Trianni, A

Leak, J Hasan, ASMM

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Publisher:: ELSEVIER SCI LTD
Publication Type:: Journal Article
Citation:: Energy Policy, 2025, 199
Issue Date:: 2025-04-01

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Field	Value	Language
dc.contributor.author	Trianni, A https://orcid.org/0000-0002-1699-7787
dc.contributor.author	Leak, J
dc.contributor.author	Hasan, ASMM
dc.date.accessioned	2025-08-11T03:45:56Z
dc.date.available	2025-08-11T03:45:56Z
dc.date.issued	2025-04-01
dc.identifier.citation	Energy Policy, 2025, 199
dc.identifier.issn	0301-4215
dc.identifier.issn	1873-6777
dc.identifier.uri	http://hdl.handle.net/10453/189324
dc.description.abstract	Energy service companies (ESCOs) are key players in reducing energy consumption for businesses, recognized globally by the International Energy Agency for their role in promoting energy efficiency. Despite this, the Australian ESCO market remains in its nascent stages. This study aims to gain an understanding of barriers hindering the development of the ESCO market, along with potential actions to support the development of the ESCO market. This study examined previous literature and conducted 54 interviews with operators in the ESCO market and final users within Australia to identify the barriers and drivers to support ESCOs. The study highlights that the main barriers to ESCO market development stem from a lack of trust, complex business models, and lack of information on costs and benefits. However, these challenges can be addressed through drivers like ESCO project investment funds, tax incentives, and performance-based energy contracts, which enhance both financial viability and trust. This study concludes with key policy recommendations to strengthen the ESCO market: developing mechanisms for strategic factor allocation, establishing an accreditation system to enhance market credibility, and prioritizing capacity-building initiatives for long-term sustainability.
dc.language	English
dc.publisher	ELSEVIER SCI LTD
dc.relation.ispartof	Energy Policy
dc.relation.isbasedon	10.1016/j.enpol.2025.114546
dc.rights	info:eu-repo/semantics/openAccess
dc.subject.classification	Energy
dc.subject.classification	3304 Urban and regional planning
dc.subject.classification	4407 Policy and administration
dc.subject.classification	4802 Environmental and resources law
dc.title	Switching on ESCOs: Barriers, challenges and opportunities for the development of Australia's ESCO market
dc.type	Journal Article
utslib.citation.volume	199
pubs.organisational-group	University of Technology Sydney
pubs.organisational-group	University of Technology Sydney/Faculty of Engineering and Information Technology
pubs.organisational-group	University of Technology Sydney/Faculty of Engineering and Information Technology/School of Mechanical and Mechatronic Engineering
pubs.organisational-group	University of Technology Sydney/Faculty of Engineering and Information Technology/School of Professional Practice and Leadership
pubs.organisational-group	University of Technology Sydney/UTS Groups
pubs.organisational-group	University of Technology Sydney/UTS Groups/Centre for Advanced Manufacturing (CAM)
utslib.copyright.status	open_access	*
dc.rights.license	This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). To view a copy of this license, visit https://creativecommons.org/licenses/by/4.0/
dc.date.updated	2025-08-11T03:45:52Z
pubs.publication-status	Published
pubs.volume	199

Abstract:

Energy service companies (ESCOs) are key players in reducing energy consumption for businesses, recognized globally by the International Energy Agency for their role in promoting energy efficiency. Despite this, the Australian ESCO market remains in its nascent stages. This study aims to gain an understanding of barriers hindering the development of the ESCO market, along with potential actions to support the development of the ESCO market. This study examined previous literature and conducted 54 interviews with operators in the ESCO market and final users within Australia to identify the barriers and drivers to support ESCOs. The study highlights that the main barriers to ESCO market development stem from a lack of trust, complex business models, and lack of information on costs and benefits. However, these challenges can be addressed through drivers like ESCO project investment funds, tax incentives, and performance-based energy contracts, which enhance both financial viability and trust. This study concludes with key policy recommendations to strengthen the ESCO market: developing mechanisms for strategic factor allocation, establishing an accreditation system to enhance market credibility, and prioritizing capacity-building initiatives for long-term sustainability.

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http://hdl.handle.net/10453/189324