How Energy Performance Contracts Work

- Sep 04, 2019-

Energy Savings Performance Contracts more commonly referred to as Energy Savings Contracts (EPCs), exist to help commercial property owners make their electric lighting and HVAC systems more sustainable and profitable. An EPC is a financing tool that considers the cost savings of a lighting retrofit into the initial grant, assuming this energy savings will match or exceed the installation cost of a new, more efficient LED lighting system. For buildings with high energy consumption rates, an investment in specialty grade LED lighting can dramatically reduce operating costs and create a lasting return on investment. With the assistance of an EPC, these facilities are essentially getting a new lighting installation for free.

A commercial property owner interested in applying for an EPC to help facilitate the transition to LED would first begin with an audit conducted by an energy service consultant (ESCO). These audits examine the property’s current energy usage and estimate the potential savings from a switch to more efficient technology. Once an ESCO determines a viable need for a lighting retrofit, the cost savings estimate is used to establish a financing plan in cooperation with available government grants.

When installation commences, the ESCO usually makes all the necessary purchases and arrangements, overseeing the project to ensure it stays within approved budgetary restrictions. Afterward, the Energy Savings Performance Contracts usually allots for a certain degree of ongoing maintenance service to guarantee that the investment is not lost or diminished during the repayment period. The best part about a government energy performance contract is that once the loan is repaid, your facility will continue to reap the cost savings benefits for years, even decades, to come.

While any construction or refurbishment project requires a host of headaches and concerns, the best part about working with an ESCO is that they will often take care of the majority of the project details. From purchasing and installation to computerization upgrades and ongoing maintenance, an ESCO has a vested interest in making sure that your new LED lighting system delivers its promised and estimated value during the repayment cycle. It’s usually a one-stop shop for a complete retrofitting of your lighting infrastructure.