Sizable capital investments can be challenging for cash-strapped municipalities.
The good news, is that there’s a procurement law in almost every state that provides for a budget-neutral solution for upgrading outdated, inefficient facilities. Energy Performance Contracting.
An Energy Performance Contract, or EPC, uses guaranteed energy savings to finance the cost of new equipment and other energy efficiency upgrades. Cities, towns, and counties throughout the U.S. have been taking advantage of EPC legislation to reduce energy consumption, improve operations, lower utility bills and achieve their Climate Action Plan goals.
EPCs are ideal for organizations looking for a third party to take on all project risks, provide guaranteed savings and are comfortable with long-term contracts. Government facilities are generally good candidates for EPC projects because with long-term ownership of the facilities, governments allow for 10- to 20-year financing terms. Additional factors to consider include:
In a typical EPC process, municipalities hire an energy services company/ESCO to conduct an investment-grade energy audit of its assets, and to identify cost-saving energy upgrade options. The ESCO should also investigate and present any low-interest financing, rebates, and incentive programs available through the state.
The ESCO serves as a single point of accountability and guarantees all project costs and savings. The municipality then utilizes those guaranteed cost savings, rather than capital funds, to pay for the upgrades.
Energy savings are measured and verified to provide further assurance that improvements are performing as planned. If projects fail to perform as well as planned, the ESCO is responsible for covering the energy-savings shortfall. The ESCO is also responsible for replacing any failed equipment.
EPCs vary in scope. Some contracts are for a single building or a sample of buildings, while others are for managing entire portfolios of buildings.
It’s critically important to select an ESCO that has a stellar safety record. They must be willing and able to deliver a multi-generational energy efficiency strategy that includes guaranteed, budget-neutral solutions, and they should be vendor independent.
It’s also a good idea to check out their Net Promoter Score – which is a clear indicator of past customer satisfaction levels.
Our integrated, turnkey approach means we are fully accountable for the success of every EPC project we undertake. We’ll conduct a thorough energy audit, evaluate and secure financing and rebate options. We’ll develop the custom design and engineering options, procure equipment, and handle all aspects of the install. We’ll also measure and verify the savings. And finally, we provide flexible, ongoing service contracts and warranty support to make sure your system stays optimized so you can focus on doing what you do best.