HOW DOES THE ENERGY SAVINGS AGREEMENT WORK
Through an Energy Services Agreement (ESA), savings generated pay for the retrofit investments while building owner continues to pay historical, adjusted baseline energy costs.
- Building owner pays the Partnership its baseline historical energy bills, which are adjusted for actual changes in weather utility rate and occupancy/usage. Energy usage in tenant space can be measured and passed through directly.
- The Partnership pays, as agent, the actual lowered utility bills on behalf of owner.
- The Partnership analyzes each building, then oversees the purchase and installation of agreed optimal energy efficiency equipment and performance monitoring services.
- The installed Active Energy Management controls and software manages the performance of the installed equipment to ensure the forecast savings are achieved.
- At the end of the contract term, building owner retains the equipment installed and resumes paying the lowered energy bills.
- How it Works: The graph below summarizes how the ESA model works financially for both the building owner and the partnership:
- Before ESA, the building owner pays at existing, higher baseline level.
- During ESA, the building owner pays the Partnership the equivalent of or slightly lower than the historical baseline, which reflects what energy service costs would have been without retrofit.
- The difference between the historical baseline and new energy service cost post-retrofit pays for the retrofit investment.
- After ESA, the building owner keeps the equipment and benefits from full utility cost reduction.