An Energy Services Company is a company that will develop, install, and finance energy projects that are designed to improve energy efficiency and reduce on-going operational and associated maintenance costs. These types of contract are known as an Energy Savings Contract or ESCO for short. Although the concept of ESCO contracts have been around for a number of years it is still an emerging market in the UK and is typically for customers with an estimated project cost of £100,000 pounds or more.
Energy Service Company - Shared Energy Saving Performance Contract
Our Energy Service Company model is based on a Shared Energy Saving Performance Contract (SESPCO) which means that we conduct both a desktop audit and subsequent site survey to calculate your exact energy usage and patterns along
with your current buildings energy performance. A high level proposal is then prepared which will calculate any financial savings that could be made, through the implementation of a range of key energy efficiency measures.
The measures available cover all aspects of a building’s performance, including heating, lighting, insulation, waste water heat recovery, and self generating renewable technologies.
For a client, the process requires no capital investment and we provide all the upfront capital to fund the project, and any investment made is recouped over an agreed payback period, based on the energy savings generated.
Our SESPCO Solution – How Does It Work
With our SESPCO solution the savings are shared from the first quarter onwards with the client, as opposed to the client under a normal ESCO model not receiving any energy saving benefits until the investment fund has recouped the capital and interest on any project.
This obviously extends the pay back period for the funder’s but provides the client with immediate visibility of savings to the bottom line.
To date project costs are typically between £250k and £750k of capital expenditure, which although are still significant, this is below the threshold of more traditional schemes operated by some suppliers. This solution is available for any private or public sector organisations with a combined heating and electricity spend greater than £250k.
Contract Period & Managed Service Fee Agreement
Typically the contracts are for 7-years based on LED Lighting and 10-years where a combination of technologies is in place, such as LED Lighting, Solar PV, Biomass, Air Source & Ground Source Pumps, Voltage Regulator, Infra-red Heating and Hydro.
At the start of the contract stage a fixed quarterly flat fee payment is agreed, unlike a normal ESCO contract where payments are calculated and linked to your energy prices, making it extremely complicated and difficult to keep track of these variable payments.
A SESPCO contract makes it’s easy to understand and offers a fixed managed service fee for the entire length of the contract.
Our solution also includes energy management and energy monitoring systems to constantly monitor the usage of your energy and improve the control of energy demand for your building. The system can also remotely control temperatures, switch lighting systems and even power down electrical equipment.
This is a fully managed service fee agreement and is not a financial loan or lease purchase, the equipment remains the property of the fund that invests and the fund maintains and manages the equipment for the period of the contract through the Energy Service Company.
We are now actively seeking any private or public sector organisations with a combined heating and electricity spend greater than £250k.
For more information on our Energy Service Company solution, please contact us to discuss. For more information on our range of FREE commercial biomass boilers, simply click this link for a product overview.
Or call us to learn more on the Energy Service Company business model and how we can help your business cut costs and reduce energy.