What is Energy Performance Contracting?

Energy performance contracting is a practical and effective way to finance and install proven energy-efficient technologies, improve your facility’s energy performance ?and save money and energy.

Through performance contracting, you can implement energy efficiency projects that pay for themselves through the energy savings, and in many cases require no up-front financial investment.

The money that you will save through reduced energy bills is leveraged to offset the cost of financing, installing, operating, and maintaining the energy efficiency measures. Your energy efficiency plan is typically designed and installed by an energy service company, or ESCO. You pay the ESCO through reduced energy bills, typically sharing the energy cost savings over a predetermined length of time, after which all of the energy savings revert to you, the facility owner.

Here’s how you can benefit from a performance contract:

• Reduced risk ?the ESCO takes on the risk of not achieving the prescribed savings.
• The ESCO shares savings with you, so all parties are positively motivated to achieve the greatest savings feasible. It’s a win-win deal!
• Turn-key services ?the ESCO provides all required services.
• Your business or institution needs less internal expertise.
• Project financing can be ‘off balance sheet?and not affect debt load.
• State-of-the-art products and services are used.
• Additional efficiency improvements can be paid for out of the energy savings.

Your ESCO will recommend cost-effective improvements, work with you to implement the recommendations you choose, and guarantee that the resulting savings will cover all project costs.

• Frequently Asked Questions about Performance Contracting

© 2006 Southwest Energy Efficiency Project
2260 Baseline Road, Suite 212, Boulder, CO 80302
(303) 447-0078 fax: (303) 786-8054 info@swenergy.org