Policy Profile

Energy Savings Performance Contracting

Policy description:

Energy savings performance contracting (ESPC), sometimes also referred to as utility energy service contracting (UESC) or simply performance contracting, is mainly a financing mechanism for retrofitting commercial buildings with more efficient technologies. HVAC, lighting, building controls, and water efficiency have all been common targets for upgrades offered through ESPC in the past. More recently, distributed renewable technologies such as solar and ground source heat pumps as well as procurement of hybrid vehicle fleets are seeing more funding from ESPC. New equipment is paid for over time through the utility bill savings, or other savings, generated by the measures themselves. “Performance contract” means that the savings from the performance of the energy investment is committed to repayment of the loan. For more information, see the full policy brief.

Download Full Policy Brief View Policy Component Questions

  1. Is there clear legislative or executive authorization?
  2. Is there a program/project administered by a state agency?
  3. Is a third party involved in oversight for the program?
  4. Are model contracts available?
  5. Is a list of pre-approved energy service companies available?