Energy Service Agreements

The company pays monthly payments to the energy services company or a bank to reimburse the equipment for the duration of the contract. While the customer will realize immediate energy savings, they will not really own the new equipment unless they purchase the contract or purchase the equipment at the end of the ESA contract. The ESA supplier pays all the costs of developing and building the project and works directly with the device manufacturer. One of the main features of quality energy service agreements is that the owner enters into an agreement with the ESA supplier. The ESA supplier may also entrust project management know-how to third-party companies such as ESCOs (energy service companies), construction companies and engineering offices. In this way, the ESA supplier can also agree to be responsible for the provision of ongoing maintenance, upgrades and improvements to ensure the sustainable success of the project. As a general rule, ESA providers take the risk of saving savings to justify the investment by providing performance guarantees (insurance). This is the first in a four-part blog series on the latest developments and trends in energy efficiency financing. The following contributions relate to CAPC and online funding, as well as funding for the deep upgrade.

With this contract, ESCO and the promoter each obtain an agreed percentage of energy savings over the duration of the contract. The catch is that while a project proponent may realize a financial benefit earlier than a first-out contract, this type of contract runs for a significantly longer period. For the rest, the two treaties are essentially similar. Sealed estimates that these packages reduce electricity consumption by an average of about 5% and fuel consumption by about 20-25%. The typical energy efficiency package costs between $6,000 and $7,000. The company finances the installation with a 20-year service contract, pays the electricity bill, and then collects a monthly service fee from the owner based on actual energy reductions, so customers` energy bills are similar to previous energy bills. By the end of 2018, Sealed had signed contracts with about 300 customers, 200 of which were signed last year.