This comprehensive empirical analysis of US energy service company (ESCO) industry trends and performance employs two parallel analytical approaches: a survey of firms to estimate total industry size, and a database of 1500 ESCO projects, from which we report target markets and typical project characteristics, energy savings and customer economics. We estimate that industry investment for energy-efficiency related services reached US$2 billion in 2000 following a decade of strong growth. ESCO activity is concentrated in states with high economic activity and strong policy support. Typical projects save 150-200 MJ/m(2)/year and are cost-effective with median benefit/cost ratios of 1.6 and 2.1 for institutional and private sector projects. The median simple payback time (SPT) is 7 years among institutional customers; 3 years is typical in the private sector. Reliance on DSM incentives has decreased since 1995. Preliminary evidence suggests that state enabling policies have boosted the industry in medium-sized states. ESCOs have proven resilient in the face of restructuring and will probably shift toward selling "energy solutions", with energy efficiency part of a package. We conclude that appropriate policy support-both financial and non-financial-can "jump-start" a viable private-sector energy-efficiency services industry that targets large institutional and commercial/industrial customers. (C) 2003 Elsevier Ltd. All rights reserved.