GLRPPR Sector Resource: Energy Savings Performance Contracts (ESPCs)
Energy Savings Performance Contracts (ESPCs)
Energy savings performance contracts (ESPCs) allow Federal agencies to conduct energy projects with limited to no up-front capital costs, minimizing the need for Congressional appropriations. An ESPC is a working relationship between a Federal agency and an energy service company (ESCO). The ESCO conducts a comprehensive energy audit for the Federal facility and identifies improvements to save energy. In consultation with the Federal agency, the ESCO designs and constructs a project that meets the agency's needs and arranges the necessary funding. The ESCO guarantees the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. After the contract ends,all additional cost savings accrue to the agency. Contract terms of up to 25 years are allowed.
National Renewable Energy Laboratory (NREL)
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