Energy service companies (ESCOs) are often portrayed as important change agents in capturing the opportunity to curb energy demand and mitigate climate change through increased efficiency. Yet, the literature in this area is limited. While many studies analyze economic and environmental savings from energy efficiency programs, far less attention has been devoted to evaluating managerial and other challenges for ESCOs to transform the “efficiency gap” into a viable business. Sweden presents an interesting case study given its early experience in energy market reform as well as the rapid growth in recent years of its ESCO market. By conducting in-depth interviews with ESCOs operating in Sweden, this research addresses the following: (1) current market opportunity analysis, including how Swedish market conditions shape firms' business strategies, (2) business characteristics and service functions, with attention to perceptions regarding which market segments are considered compelling, and (3) how policy might expand the size and attractiveness of additional sectors/market segments. This analysis is informed by additional discussions with policymaker, agencies, authorities, and customers. The insights garnered are important as Member States prepare to implement the Directive on Energy End-use Efficiency and Energy Services. Despite rapid growth, ongoing challenges remain for ESCOs. Government still has a role in education, policy, and residential sector solutions. Greater details and data on the energy savings produced by ESCO projects are needed. Future research could address best practices for reporting data from ESCO projects. Moreover, with additional data on ESCO projects, studies could benchmark these results with other international programs to promote energy efficiency.