Energy Performance Contract (EPC)
The contract that finances energy efficiency
Energy Performance Contracts (EPCs) offer a flexible model for improving corporate energy efficiency through a scalable investment.
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Depending on the agreement, the investment may be:
- Totally borne by E.S.Co,
- Divided between E.S.Co. and the client company ,
- Covered in part by the company itself with co-financing.
Regardless of the investment mode chosen, E.S.Co. is committed to ensuring a minimum level of energy savings taking responsibility for the result. The customer thus obtains targeted interventions to optimise consumption, with the certainty that savings will actually be achieved.
This approach allows efficiency projects to be realised with tailor-made solutions, optimising costs and benefits over time.
How does an EPC contract work?
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The energy performance contract (EPC) is based on a ‘win-win’ model that guarantees concrete results while minimising risks for the company.
The basic idea is that the investments required for the intervention can be supported by the ESCo, by an external investor, by the company itself or through a combination of several parties.
In any case, whoever finances the project (the ESCo or an investor) is remunerated on the basis of a percentage of the energy savings actually generated.
Here are the main steps of an EPC contract:
1
Preliminary analysis and energy audit
- Evaluation of company consumption and possible inefficiencies.
- Definition of savings targets and possible solutions.
2
Intervention design
- Identification of the most effective technologies for energy optimisation.
- Estimated expected savings and payback time.
3
Financing
- The investment may be borne entirely by the ESCo, by an external investor, by the client company or split between several parties.
- The agreements stipulate that the lenders return the investment through a share of the energy savings achieved.
4
Realisation
- Installation and implementation of efficiency solutions.
- Start-up of installations and adopted technologies.
5
Monitoring and remuneration
- Continuous monitoring of performance and timely verification of savings generated.
- The lender (ESCo or investor) recovers its investment through the share of energy savings realised. The company thus benefits from a reduced energy cost right from the start and with minimal risk.
Why choose an Energy Performance Contract?
Flexible initial investment
The project can be financed by ESCo, external investor or company, without tying up capital.
Energy saving and pay-per-results
ESCos and investors are paid only on the basis of actual savings, ensuring a shared interest in maximising efficiency.
Improving efficiency
The solutions adopted reduce consumption per unit of production, improving processes and containing costs.
Potential reduction of environmental impact
Waste and emissions may decrease, but the real benefit depends on the energy mix, the lifecycle of the plants and the possible increase in production.
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