What is an Energy Performance Contract?
An Energy Performance Contract is a financing or operating lease provided by an Energy Service Company (ESCO) or equipment manufacturer. What distinguishes these contracts is that they provide a guarantee on energy savings from the installed retrofit measures, and they usually also offer a range of associated design, installation, and maintenance services. The contract period can range from 5 to 10 years, and the customer is required to have a certain minimum level of capital investment (generally $200,000 or more) before a contract will be considered. Under an energy performance contract, the ESCO provides a service package that typically includes the design and engineering, financing, installation, and maintenance of retrofit measures to improve energy efficiency. The scope of the improvements can range from work that affects a single part of a building’s energy-using infrastructure (such as lighting) to a complete package of improvements for multiple buildings and facilities. Genera
