ESCO business model for energy conservation in Sri Lanka

Abstract

Energy service company (ESCO) is a renowned concept in the developed world for energy conservation projects, although there is lack of suitable ESCO business model for guaranteed return and safeguard energy performance risks in energy conservation projects in Sri Lanka. This study therefore aims to investigate the gap between the existing energy service practices in Sri Lanka and ESCO concept, and to develop an ESCO business model accordingly, a comprehensive literature review and in-depth interviews with 12 subject matter experts were carried out to achieve the aim. Research findings identified ten sub-elements under four main elements, i.e., value proposition, customers, value creation and delivery and value capture, in the proposed ESCO business model. Key findings further revealed 'guaranteed saving' as the best finance model for Sri Lankan built environments. The research finally developed an ESCO business model incorporating appropriate energy service practices which will lead both ESCOs and the clients in Sri Lanka to gain the competitive edge.