Details | Shared Savings Contract


Funder

 

Energy Service Company

Implementer

 

Energy Service Company

Description

 

Through a Shared Savings Contract (SSC), an ESCO can define a payment structure where their sole compensation comes through a share of the utility-cost savings. Due to the large upfront investment, a greater percentage typically goes to the ESCO, but then decreases over the life of the project. Shared Savings Agreements have been around the local government marketplace for about 30 years. A private sector company finances the evaluation (e.g., energy audit), design, installation, and maintenance of an energy management system for a facility, system, or component and warranties it for a contracted period of time. They will also often guarantee the energy savings, sometimes with an insurance policy. This is a turn-key operation. The company is willing to underwrite this cost because they only engage a local government when the savings in dollars from implementing the energy saving measures exceed the total amortized cost. After the term of the agreement, all of the savings due to reduced energy costs are retained by the local government. In some cases, local governments may also collect a portion of the savings during the contract period. ESCOs providing SSCs generally act as project developers for a wide range of tasks and assume the technical and performance risk associated with the project.

Funding guidance

 

Applications open

 

None

Applications close

 

None

Type

 

Performance Contract

Category

 

Service Provider

Territory

 

United States

Applicant type

 

For Profit  |  Private Resident  |  Public Agency

Project

 

Rehabilitation of Existing Whole Building  |  Rehabilitation of Part of an Existing Building

Sector

 

Commercial  |  Industrial  |  Public  |  Residential

Sub-sector

 

City  |  Commercial  |  County  |  Data Center  |  Education  |  Health Care  |  Hospitatlity  |  Industrial  |  Multi Family  |  Retail  |  Single Family  |  Special Districts  |  State

Sustainability

 

Energy Efficiency for Processes  |  Energy Efficiency in Buildings  |  Energy Management System  |  Energy Storage  |  Generation Systems

Additional website

 

Small business

 

False

Disadvantaged communities

 

False

Cost sharing amount

 

None

Cost sharing percent

 

None

Cost sharing note

 

Minimum repayment years

 

None

Maximum repayment years

 

None

Interest rate comment

 

Incentive