Financing that simplifies the increasingly multifaceted landscape of smart building controls and energy infrastructure.
Best of Breed Solutions
Because customers pay ESA providers based on the actual amount of realized energy savings, there is an alignment of goals to maximize the realized energy savings.
Energy Savings Agreements
Energy service agreements (ESA) and efficiency as a service (EaaS) are flexible financing mechanisms that can incorporate a wide range of efficiency measures. Property owners receive energy technologies and services in exchange for a service fee (operating expense), versus outright purchase (capital expense).
- Finance the outsourcing of commissioning, design, installation, maintenance and performance management services.
- 100% project financing includes permits, inspection, design, and maintenance
- A flexible way to improve operations and reduce expenses by combining energy-saving upgrades into one service contract
- Typically range from 7 to 15 years and the renewable project developer remains responsible for the operation and maintenance of the system for the duration of the agreement
- Financed projects can quickly facilitate compliance with mandated (i.e. NYC Climate Act) or voluntary corporate (ESG) carbon reduction and resiliency goals
A good fit for retrofits
The improvements financed by ESAs can benefit new construction, but the financing is most frequently used for retrofits, where a strong baseline of energy use preexists the improvements. To determine the baseline the SPE commissions an investment-grade energy audit of the subject property, which also yields a list of recommended energy conservation measures (ECMs).
Property types that most often benefit from ESAs financing include:
- Campus-wide (corporate or educational) efficiency projects with multiple measures
- Multi-property owners or tenants with strong credit profile, i.e. national retailer
Discuss a Project:
ESAs and EaaS financed projects are both energy-savers and cash-flow-positive from day one. While this sounds great, we’re sure you have questions. We’ve addressed a few here, but feel free to ask your own by clicking below.
What happens at the end of a ESA term?
At the end of ESA contract, a property owner can extend the agreement or purchase the equipment at fair market value, and dissolve the SPE.
What is the typical size in dollar amount of an ESA financed project?
The general project scale of an ESA is greater than $5 million in improvements though this can be spread among several properties, i.e a high-efficiency boiler for each multifamily property in a regional portfolio.
What happens to an ESA agreement when a property is sold? Is there a prepayment penalty?
Prepayment terms are specified in advance, so the agreement can transfer on sale similar to an equipment lease, or the agreement can be terminated based on the prepayment conditions.