XL EagleESPC (Energy Savings Performance Contract)
ESPC stands for Energy Savings Performance Contract. An energy savings performance contract lets an energy services company pay for and install energy upgrades at a federal facility. The company is repaid over time from the energy and water savings the upgrades create.
The contractor guarantees the savings, and terms can run up to 25 years. Projects often include HVAC, lighting, controls, boilers and water fixtures.
Why it matters to a small contractor
ESPCs drive a lot of HVAC, lighting and controls work. Energy services companies hire local mechanical and electrical subs to install and maintain what they sell.
Example
An energy company upgrades chillers and lighting at a federal campus. The project costs $6 million and is paid back from about $400,000 per year in guaranteed savings.
ESPC: common questions
Does the government pay up front for an ESPC?
Usually not. The contractor arranges financing and is paid from the savings.
What happens if savings fall short?
The contractor guarantees the savings, so it generally has to make up the gap.
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