An Energy Performance Contract (EPC) is an innovative form of contractual partnership, developed to overcome the major barriers of delivering cost-effective energy efficiency.
In a performance contract, the energy services contractor identifies and can guarantee a specified level of energy savings. These and other savings are used to finance energy efficiency improvements.
Businesses are operating in a difficult economic environment which is getting tougher due to:
- High energy costs
- Limited available capital for energy infrastructure upgrades
- Stretching carbon targets
- Plethora of sophisticated energy technologies which require expert 3rd party design, installation and maintenance
- An EPC overcomes the need for upfront capital investment and can guarantee future energy or carbon savings
- It is an innovative approach to reduce finance and technology risks for the customer
- EPCs are long term contracts (up to 20 years) depending on the type and mix of measures installed
- The EPC contractor will be responsible for the on-going operation and maintenance
- The capital repayment is designed to be equal to or lower than the identified energy savings
- A comprehensive Monitoring & Verification plan runs in parallel for the duration of the contract to verify the savings and ensure appropriate calibration of the energy consumption baseline
- Savings will continue to be realised after the end of the contract