METI / ECCJ / ACE Training Program MTPEC04 (2006.02)

II-2(2). Energy Conservation Measures for the Commercial/Residential Sector

Promotion of ESCO Business
What Is the ESCO Business?

A business that offers comprehensive services on energy conservation to clients, who in return will offer a part of their energy saving gains (saving on utility bill, etc.)
The business has two forms: "Guaranteed savings agreement" where customers cover business costs and "Shared savings agreement" where the ESCO business covers business costs. These options enable service provision according to customer needs.
*ESCO stands for Energy Service Company.

Overview of the ESCO business

II-2(2). Energy Conservation Measures for the Commercial/Residential Sector Promotion of ESCO Business ESCO-Related Market Scale
ESCO-related markets have shown rapid growth in recent years with substantial room for market expansion. (FY2004 purchase orders: Approx. 37.4 billion yen)
A research estimates its potential market size as 2,470 billion yen. (Source: The ECCJ's ESCO Introduction Promotion Study Group Report) The market scale of the ESCO business in the US in 2000 is approx. US$ 2 billion.	Scale of ESCO-related markets
	Source: JAESCO (Japan Association of Energy Service Companies) survey

II-2(2). Energy Conservation Measures for the Commercial/Residential Sector

Support for the Introduction of ESCO Business

Support, in the forms of partial subsidy for initial investments, low-interest loans, etc., is extended to private enterprises and local governments implementing the ESCO business.
A model ESCO project will be introduced also at a national facility, i.e. METI building from FY2004 onwards.

Example of ESCO business introduction (at a hospital)

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