SAN ANTONIO - April 10, 2002 - Performance contracting is a powerful, self-funding business tool. However, those users that stand to benefit the most are often unaware of the potential cost-savings.
New analysis from Frost & Sullivan (www.buildingtechnologies.frost.com), North American Performance Contracting Markets, reveals that this industry generated revenues exceeding $3 billion in 2001 and is projected to near $5 billion by 2008.
"Performance contracting is an innovative financial method that allows building owners, or trustees, to provide much needed infrastructure improvements to their facilities," says Frost & Sullivan Industry Analyst Ron Cook.
The performance contractor or energy service company identifies and evaluates energy-saving and operational efficiency opportunities, and then recommends a package of improvements that is actually paid for through these savings, avoiding 'out of pocket' initial costs.
"This financial option offers a number of important benefits allowing end-users to proceed with infrastructure projects that tight budgets, credit restrictions, or procurement procedures would otherwise prevent," says Cook. "Therefore, performance contracting offers an effective solution for cash-strapped schools, hospitals, and related facilities."
Due to lack of reliable information, many users fail to realize that energy conservation measures are as valid as any other operational savings. As a result, industry participants are focusing their education efforts on the municipalities, universities, schools, and hospitals markets where efficiency measures can prove especially lucrative to owners and beneficial to end users.
"The U.S. creates waste stream revenues in excess of $12 billion every year as a result of inefficient and outdated building environments," says Cook. "Such inefficiencies can be readily upgraded today, given the technology choices available.
"Community leaders and government officials need to be continually informed about the high prices they, and the taxpayers, are paying for these inefficient buildings," adds Cook.
After identifying the appropriate executive-level of influence, industry participants must show how an increase in the operational stream relates to a higher net income, improved environmental conditions, and the safety of the building occupants.
Cook stresses, "This means carefully explaining how potential revenue streams and capital avoidance dollars can be redirected into the core competency of businesses or institutions."
Frost & Sullivan is a global provider of strategic market consulting and training. This ongoing research is part of the Building Automation Monitor Service, which also includes market analyses on North American HVAC Controls Markets and North American Building Automation Systems Market. Frost & Sullivan also offers custom consulting to a variety of national and international companies. Executive summaries and interviews are available to the press.
North American Performance Contracting Markets
Report: A101
Contact:
Cynthia Cabral
Media Relations Executive
P: 210.247.2440
F: 210.348.1003
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www.frost.com
