Procurement of Energy Service Contracts
Older buildings that were built when energy was less expensive are inefficient. We have had the technologies to do deep retrofits and make them passive and resilient buildings that are healthy occupants for decades so why aren’t we doing so?
It is difficult to get capital to do deep retrofits of existing buildings.
There are always demands for your capital—whether it is meeting deferred maintenance items taken care of, or using it for investment in your growing organization, it is difficult to get the capital to do a deep retrofit that has usually has a long payback.
What if you could get capital that does not appear on your books at all? There is new financing that is available for organizations that want to upgrade their buildings. This is called an “energy service contract” or “energy service performance agreement”. The provider of these contracts is often referred to as an “ESCO”.
The ESCO loans you the energy efficient building products and equipment and you pay them back over time. The energy savings from the use of the building products and equipment is great than the loan repayment amount. That creates a net cashflow positive situation for your organization.
How do you procure such services? Your organization could issue a Request for Expression of Interest to discover which entities would be willing to enter into an ESCO arrangement. Or you could issue a Request for Proposal for Energy Efficient Retrofit Services which outlines the project, the incentives for performance and the standards for the delivery.
We are familiar with this process and have worked on projects that have set precedents for their success in achieving high levels of energy efficiency and carbon savings.