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An energy performance contract is an agreement between an organization and energy savings company, which guarantees energy savings and can provide financing for departments that have little or no access to capital funding. As such, these agreements often make retrofits more attainable and can place ambitious energy efficiency goals within reach. Under energy performance contracts, an energy service company:

  • assesses a facility's energy systems and equipment,
  • identifies opportunities for buildings to conserve energy,
  • recommends and implements energy efficiency improvements,
  • provides the financing, engineering and energy management expertise,
  • monitors the results of retrofits and upgrades,
  • provides training for building operating staff on new or existing equipment and systems, to ensure energy savings are maintained over time, and
  • guarantees a specific amount of energy savings.

Win-win approach

This low-risk, turnkey approach delivers guaranteed results that lead to overall reduced operating costs. The risk to the organization is low as the energy service company assumes the initial capital costs. The federal organization then repays the energy service company over a specified period from the resulting energy savings. Once the payout period is over, the organization benefits from the long term energy savings.

Ready to capitalize on an energy-performance contract of your own? Find out what you need to know in our step-by-step Energy Performance Contracting: Guide for Federal Buildings [PDF - 4.91MB].