What does ESPC mean in GENERAL

An ESPC is an Energy Savings Performance Contract, which is an agreement between a federal agency and a qualified energy services company (ESCO). The contract outlines the purchase of energy efficiency or renewable energy services that are paid for with savings created by the improvements.

An ESCO will assess the facilities' current performance and determine where there are opportunities for cost-effective efficient improvements. These improvements can be upgrades to heating and cooling systems, weatherization projects, solar photovoltaic installations, lighting upgrades, etc. The ESCO finances, installs and maintains the equipment, while the customer pays them back with money saved from reduced utility bills.

Yes! With no up-front costs required by customers, this type of contract allows public agencies to take advantage of available energy efficiency measures without having to utilize scarce resources. Additionally, with these contracts in place customers are often able to save 10% to 20% or more on their annual energy bill.

Both sides benefit from this type of contract as they ensure that both parties get what they want out of the arrangement. For the federal agency or customer it means guaranteed savings and improved comfort levels at their facility; whereas for the ESCO it means guaranteed payment for delivering services and equipment to meet those goals.