U.S. energy service companies (ESCOs) are very interested in expanding their businesses outside the U.S. Despite the needs of many countries for ESCO involvement, ESCOs face many challenges (i.e. marketing, financial, institutional, political and cultural impediments). Using Japan as an example, we present (i) impediments to the development of an ESCO industry, (ii) general guidance for helping Japan to develop its own ESCO industry, (iii) specific ESCO development strategies for Japan, and (iv) recommendations to U.S. companies considering joint ventures between U.S. ESCOs and Japanese companies.