Energy performance contracting is an innovative savings-financing arrangement that provides energy management and project development services to building owners and managers on a performance basis.
Simply put, an energy service company (ESCO) assesses all your energy systems and equipment, identifies possible energy savings opportunities, recommends energy efficiency improvements and monitors the results, all at no upfront cost or risk to you. You then pay the ESCO with the annual savings generated by your energy efficiency project.
This approach was developed to overcome major barriers that often prevent organizations from addressing energy saving opportunities, including lack of technical expertise and limited capital budgets.
This financing arrangement is normally reserved for complex projects in public buildings, as well as large commercial and institutional organizations.
The Office of Energy Efficiency's (OEE's) Federal Buildings Initiative (FBI) has helped facilitate several successful energy performance contracting projects at the federal government level. To date, there are over 85 retrofit projects, attracting $320 million in private sector investments and generating over $40 million in annual energy cost savings.
To find out more about the various phases and activities of energy performance contracting, visit the Energy Performance Contracting Process Web page.
Examples of Energy Service Companies
The FBI maintains a List of Qualified Bidders that provide energy management services to the Government of Canada. All these companies also serve commercial and institutional buildings.
The OEE also maintains a searchable list of consultants and other service providers through the Energy Management Services Directory, but most do not offer energy performance contracting.
For more information on energy performance contracting, the FBI offers publications such as The Federal Buildings Initiative: An Executive Overview and a number of case studies, project synopses and highlight sheets about federal government organizations that have participated in energy performance contracting projects.
These publications were prepared for federal buildings, but many of the concepts can be adapted to meet the needs of other organizations.
You can also purchase the Practical Guide to Carry Out Projects by Using Energy Service Companies (ESCo), developed in conjunction with the OEE, available from the Association des Gestionnaires de Parcs Immobiliers Institutionnels [Association of Institutional Property Managers] ($125 plus GST).
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