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Energy Savings Performance Contracts

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The federal government spends billions of dollars on energy costs each year, and financing large-scale projects can be prohibitively expensive for a federal agency. Congress authorized Energy Savings Performance Contracts (ESPCs) to encourage federal agencies to become more energy-efficient and to reduce their energy costs. ESPCs enable agencies to improve energy efficiency—reducing energy use and costs—through private investments.

An ESPC is an agreement between a federal facility and an Energy Services Company (ESCO). The ESCO designs a project to increase the energy efficiency at a facility. The ESCO then purchases and installs the necessary equipment, such as new energy-efficient windows, automated controls, and updated heating, ventilation, and air conditioning equipment. In exchange for not having to pay for the equipment, the federal agency promises to pay the company a share of the savings resulting from the energy efficiency improvements. The ESCO is responsible for maintaining the equipment, as well as measuring the energy consumption and savings.

EPA is pursuing ESPCs to finance the significant initial cost of comprehensive energy upgrades. The Agency expects to achieve a greater than 50 percent reduction from current energy consumption levels for each facility undergoing a comprehensive upgrade financed through an ESPC.

EPA facilities using ESPCs include:

More on ESPCs


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