The core mission of achieving energy savings remains central to the relationship between institutional and commercial facilities and Energy Service Companies (ESCOs). However, facilities are constantly evolving due to various factors like maintenance issues, climate change, and occupancy shifts. While ESCOs have existed for around 40 years, the industry continues to adapt to meet these changing needs.
Traditionally, energy efficiency projects were driven by deferred maintenance. Facilities managers often face inadequate budgets, and energy savings performance contracts (ESPCs) provided a way to secure funding for updating equipment by borrowing against future energy savings. This allowed them to address critical maintenance needs that would otherwise go unmet.
However, the motivation behind ESPCs is shifting. The emphasis is moving away from solely guaranteeing energy savings and towards updating facilities with new technology and systems. Instead of focusing on savings alone, the priority is now on modernizing infrastructure.
Another shift involves the scope of services ESCOs provide. In the past, ESCOs primarily focused on retrofitting lighting or HVAC systems. Today, many ESCOs also manage systems and handle the actual construction and installation. The future of energy service contracts is trending away from guaranteed energy savings or design-build contracts and towards service-oriented agreements. This might start with smaller construction projects and evolve into more comprehensive services, including facility operation by a third-party ESCO, even during construction.
Building resilience is a crucial aspect of the evolving ESCO process. Facilities like K-12 schools, military sites, and healthcare buildings must maintain power during storms and natural disasters. Performance contracts are now incorporating resilience measures to ensure these facilities can continue operating during emergencies. Projects are expanding beyond basic LED and HVAC upgrades to include heat pumps and other components that support electrification and decarbonization efforts. Electric vehicle charging stations are also emerging as a new type of performance contract project. Solar and battery storage solutions are increasingly integrated, particularly in resilience-focused projects that prioritize electrification. This adds significant value to the community by enhancing energy independence and reducing reliance on the traditional grid.
When considering a partnership with an ESCO, facility managers must define their goals and ensure everyone is aligned. The energy savings performance contract offers a blank slate, allowing building owners to pursue various projects they’ve been considering.
More information is available here.
Image: Pexels.com
You must be logged in to post a comment.