The steps involved in an EPC may vary depending on the specifications of the contract, but usually include the following:
Determining the current consumption and identifying opportunities: the ESCo carries out an energy diagnosis to determine current energy consumption of facilities, systems or processes and identifies opportunities for energy efficiency improvement.
Sharing proposals: the ESCo shares the possible opportunities with the customer so that he/she is involved in decision-making as he/she is an active participant in pursuing and achieving the savings objective.
Planning: the ESCo draws up a detailed action plan to implement the energy efficiency improvements identified in the previous step.
Implementation: the ESCo implements the energy efficiency improvement solutions in accordance with the agreed action plan.
Monitoring and evaluation: the ESCo monitors the results to verify that the agreed energy efficiency targets are achieved and maintained over time.
Payment: depending on the duration and type of the contract, the ESCo
- collects the full amount of the savings to repay the investments for a specified time. At the end of this period, the entire benefit passes to the customer [first out contract]
- shares the actual savings achieved with the end customer, from the beginning, according to a predefined percentage [shared saving contract]
- guarantees a minimum level of performance by providing forms of compensation for the customer in the event of failure to reach the target (under-performance) and sharing in the event of savings greater than expected (over-performance) [guaranteed saving contract]
- guarantees a fixed saving with respect to historical energy expenditure from the outset by collecting the savings obtained for the entire duration of the contract [first in contract]
Note: this is only a general overview of the steps involved in an EPC and may vary depending on the specific conditions of a contract.