What is Energy Performance Contracting?

Energy Performance Contracting (EPC) offers customers guaranteed improvements in buildings' energy performance without the need to expend capital. It is a form of creative financing and turnkey program that allows building owners funding for energy efficiency upgrades from energy cost savings guaranteed by the contractor.

The basic procedure is as follows: Building owner decides to utilize the EPC process and competitively selects an Energy Service Company (ESCO), also referred to as Energy Saving Partners, or Contractors. Owner issues a contract to the contractor to conduct energy audit of the facilities. The latter identifies which bundle of measures can be included in the ESP project since some measures with short payback periods (e.g., lighting) can offset the longer payback periods of boiler and chiller replacements if they're bundled under one contract. Contractors input their know-how as they plan, design, install and maintain conservation measures to upgrade existing buildings. They finance their investments through the savings made in energy costs and guarantee energy cost savings from 10 to 20 years. If installations stop working, the contractors must also ensure service continuity. Energy savings success is then monitored through measurement and verification.

Ideal candidates for ESP projects include any large building or group of buildings, such as city, county, and state buildings; schools; hospitals; and commercial office buildings. Energy Contracting is an excellent option in retrofitting public buildings with new energy systems without using the municipality´s financial and staff resources.

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