Is an energy performance contract (EPC) a service contract or a construction contract?
Unlike a typical construction contract, an EPC is a service or performance-based contract that involves some form of guarantee. The performance contract provides a savings guarantee (or performance guarantee) over the life of the project. This reassures the organization that no matter how well the savings proceed, the EPC will have no claim beyond the contracted savings and savings generated by the energy efficiency improvements will be sufficient to repay the investment in the project in the fixed number of years. This guarantee also provides some reassurance that by the end of the contract the savings turned over to the federal organization will be ongoing.
