What is Energy Performance Contracting (EPC)?

Here is how it works: 

You enter into a partnership with an ESCO, such as Energy Systems Group (ESG), and they will identify and evaluate energy-savings opportunities and then recommend a package of improvements to be paid for through savings. ESG will guarantee that savings meet or exceed annual payments to cover all project costs—usually over a contract term of one to fifteen years. If savings don’t materialize, ESG pays the difference, not you. To ensure savings, ESG offers staff training and long-term maintenance services which can be accomplished by them, the district’s own staff or other outside companies. These are services that the District would need to be perform on the existing equipment as regular maintenance regardless of an EPC project. With rising energy costs utilizing an EPC to reduce your energy budget and provide infrastructure improvements now through existing budgets makes sense! 

To put it simply…

Your District can take money that would have been paying utilities and, with your new energy improvements, use the savings to pay for needed building and infrastructure improvements now.

  • Budget Neutral Financing 
  • No Taxpayer Impact 
  • Self-Funding 
  • No Out-Of-Pocket Expenses 
  • Guaranteed Savings

All of this while improving your student and staffs working and learning environment! It is a WIN WIN!

What are the advantages of an EPC? 

According to data from the U.S. Department of Energy and the U.S Environmental Protection Agency, K-12 schools spend more than $8 billion annually on energy, making energy the second-highest operating expenditure for schools after personnel costs. Most schools could save about 25% of these costs through energy-smart solutions and programs. So, what are the advantages of doing an EPC for your District? 

  • No Budget Vote Necessary 
  • Lower Operational & Maintenance Costs 
  • Reduction in Utilities / Energy Usage & Cost 
  • Installation of Clean & Efficient Systems 
  • Faster Approach to Facility Improvements / Addressing Deferred Maintenance 
  • Creating Positive Cumulative Cash Flow 
  • No Change Orders (all unforeseen conditions are ESG’s risk) 
  • Guaranteed Savings 
  • Measurement & Verification to Ensure Guaranteed Savings by the ESCO 
  • More control over products being installed and the quality of sub-contractors 
  • No Taxpayer Impact 
  • No Out-of-Pocket Expenses

What are typical improvements? 

There are many types of building improvements can be funded through your existing budgets and be adjusted to your needs: LED lighting technologies both interior and exterior, ventilation, indoor air quality (IAQ), boilers, chillers, hot water heaters, energy management controls, demand control ventilation, renewable technologies (i.e. ground, roof, canopy solar), cogeneration technologies, window and door replacements, building insulation and envelope, retro commissioning, pump/motor replacements, combined heat and power systems, roof top units, roof upgrades, computer controllers, and other improvements.

What does an ESCO do? 

An ESCO will investigate the opportunity, develop, design, engineer, install and implement improvements for the district. The ESCO guarantees the performance of the project to generate the cost savings to pay for the project over the term of the contract.

A qualified ESCO, such as ESG, can help you put the pieces together: 

  • Identify and evaluate energy-saving opportunities
  • Develop engineering designs and specifications
  • Manage the project from design to installation to monitoring
  • Work with your Financial Advisor for financing
  • Train your staff and provide ongoing maintenance services
  • Guarantee that savings will cover all project costs. Minimize risk by using many Options, A, B & C

Why Partner with ESG? 

Energy performance contracting is our CORE business. From the initial energy audit and engineering through long-term measurement and verification of project savings, our ESG team will design and implement solutions that fit the needs of each District and result in significant energy and operational cost savings and environmental and educational benefits. 

  • Open and transparent from start to finish, dedicated to your timeline—we are partners. ESG is here to support your vision through collaboration, professionalism, innovation and reliable solutions. 
  • ESG’s has completed more than $1 billion in comprehensive energy performance contracts for K-12 Schools
  • ESG believes in utilizing the project to include student educational enhancements, community outreach, and MWBE participation
  • Proven energy savings through Measurement and Verification Options, including Option C utility bill analysis, in a collaborative process and documenting savings. ESG has a 30/60/90% transparent review process to garner feedback and correct initiatives. 
  • ESG will provide a project that positively impacts your District, students, staff, and community in partnership with you.
  • ESG’s energy efficiency and facility modernization solutions help: 
  • Enhance & improve the quality and comfort of learning/working environments and building conditions
  • Provide a product-neutral, vendor-neutral approach using your local contractors, vendors and suppliers
  • Promote environmental & financial stewardship
  • Provide student engagement program opportunities
  • Reduce carbon emissions/footprint
  • Increase safety
  • Improved maintenance efficiency and system reliability
  • Reduction in energy/utility usage and spend

1. “Energy Savings Performance Contracting,” Energy.gov,