Foreseeable Growth in the Utilities Industry: A 2017 Industry Update

March 1st, 2017

The utilities industry is a hot topic throughout the economy and ARM industry because of its size, number of companies, technological and cultural developments, and current political landscape. These aspects play a massive role in the formation and evolution of the utilities industry, and may see rapid changes in the near future under the Trump Administration. Seeking to be very business-friendly, Trump desires deregulation and economic expansion, so it makes sense that the utilities industry should grow throughout his term since it’s heavily regulated and is stereotypically fighting against environmentally-conscious legislation and initiatives. Under Trump, we’ve already seen a complete 180 from former president Barack Obama on how the utilities industry affects the environment. As such, OBS and ARM companies should consider entering or expanding their utilities industry-related operations.

First off, the utilities industry shrunk minimally to just south of $600 billion in 2015, down from about $600 in 2014. However, per the Utilities Market Revenue Trend graph below, we can see that this industry experienced fluctuations over since 2009 so this drop shouldn’t be an ongoing trend. In fact, we project the industry to grow to nearly $700 billion by 2020. This presents the OBS and ARM industries – specifically debt collectors and call center operators – significant opportunities just based on the size of the market.


Next, there are thousands of different utilities companies – spanning from electric power generators, natural gas providers, water suppliers, or various combinations of the three. There were over 5,900 individual firms, ranging from small (less than 20 employees) to large (greater than 500 employees) employment sizes, with tens-of-thousands distinct establishments. Whether you’re an existing OBS servicer to the utilities market or potentially seeking entry, there are several options and routes that you can take to generate revenue in this sphere.

Third, there’s been significant technological developments in this sphere over the past decade, notably the rising popularity and efficiency of alternative energy production – namely wind and solar power (not to mention other renewable sources of energy). Technological developments are arguably the most revolutionary drivers of any type of change throughout history (e.g., advent of the Internet over the past half-century or the printing press invention centuries ago). Recently, we saw Tesla, Inc. acquire SolarCity Corporation, a solar energy service provider, for about $2.6 billion. Considering that Tesla, led by Elon Musk, is one of the leading global technology innovation companies, it’s safe to believe that there’ll be considerable evolution and growth in the utilities market.

Lastly, since Pres. Trump’s victory last November, we’ve seen numerous indicators of his stance on business and the economy, and specifically how they affect the utilities industry. From nominating Scott Pruitt as Environmental Protection Agency (EPA) Administrator, to one of his advisors noting that the administration would like to drastically cut the EPA’s budget, to his executive orders to, more or less, complete the Keystone XL and Dakota Access pipelines, we can clearly see that he wants to generate economic growth through the utilities industry. Nonetheless, it’ll be interesting to see how this point interacts with technological advancements in this industry. Will these executive orders and any other actions mitigate or slow the growth of alternative energy sources?

When it comes down to it, utilities presents consumers with seemingly vital resources to everyday living, notably water and heat. Considering this in addition to the size, number of potential contracting opportunities available, technological developments, and the new administration’s business-related stance on utilities and energy, we recommend interested OBS and ARM industry participants to consider investing into this sphere.

This blog presents a high-level look at the utilities industry but there’s much more in-depth information to learn. To access the rest of Kaulkin Ginsberg’s in-depth utilities industry research and analysis, in addition to other in-depth market data (e.g., financial services or healthcare), please contact us about becoming a KG Prime member.

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