Beginning an energy redevelopment project or facility upgrades can be daunting. Working with an Energy Service Performance Contractor (ESPC) can make the designing, building and funding of your energy project much more manageable processes. With ESPC agreements, the organization or entity parters with a certified Energy Service Contractor (ESCO). ESCOs act as project developers and take on a range of responsibilities in an energy efficiency project and will assume the risks associated with it. ESCOs are certified by the National Association of Energy Service Companies (NAESCO) and are located across the US. To locate certified ESCOs near you, check out NAESCO’s member list.
What are ESPCs & how do they work?
Energy Service Performance Contractors facilitate energy projects using a funding tool called Energy Service Performance Contracts. These contracts use future energy savings to pay for valuable facility upgrades while leaving your capital assets untouched. Energy Service Performance Contractor partnership agreements can occur between commercial, nonprofit or government entities and an ESCO, like EnergyLink, to efficiently and cost-effectively execute an energy redevelop project.
The ESPC process has four steps and begins when the customer either places a request for proposal from an ESCO or contacts an ESCO directly. Once the ESPC agreement is signed, the first step of the process can begin, and it involves completing an energy audit or full building analysis. The ESPC will conduct a comprehensive audit in order to get a complete understanding of you facilities current and historical energy usage needs. The second step is the design-build phase and involves EPC services. EPC services stand for engineering, procurement and construction. In this phase an engineering team will engineer the energy improvements your facility needs, purchase the necessary equipment, and oversee the construction teams installation progress.
The third step of the ESPC process is the funding phase in which the best funding method is selected for your project. Common funding options include debt financing, third party ownership, leases and PPAs, and rebates and grants. The fourth step involves measuring and confirming the energy savings are what they were promised to be. Performance can be measured either in the form of energy savings in dollars to energy savings in kilowatt-hours or another key performance indicator. The ESCO will measure energy savings on an annual basis. Some ESCOs will also perform routine maintenance of your energy system if this service was included in the original ESPC agreement.
When choosing an Energy Service Performance Contractor it is important to make sure that they are capable of performing all steps of the energy project process. If an ESPC cannot perform auditing, engineering, procurement, construction, financial analysis and funding acquisition you should find a more capable partner. When it comes to financing, it is also crucial that the ESPC is fully integrated with funding partners.
Benefits of Energy Service Performance Contract agreements
There are many financial and practical benefits to entering into ESPC agreements. Your organization will be able to get the facility updates it needs done promptly without expending capital assets. Because no capital assets are used, facility updates are low risk. ESPC agreements with EnergyLink offer guaranteed energy savings and performance in addition to low interest finance options. Annual energy savings are also measured at IPMVP standards to insure that your project is meeting its expected performance and savings rates. Finally, the Energy Service Performance Contractor will be the sole contact for the agreement, making for an easier process.
Interested in an ESPC agreement for your next energy project?
As a certified ESCO, EnergyLink has the knowledge, capabilities, and skills to complete an effective ESPC project for your organization from start to finish. Click the button below or speak to a team member at (866) 218-0830 to get your energy project started.