Let’s face it. Every multifamily or commercial building owner would like to substantially lower their utility costs. Prices for energy and water are projected to go nowhere but up in the future. When you start to factor in the new regulations going into effect across the country mandating higher levels of building energy efficiency, paying for these required improvements presents a real challenge.
Efficiency upgrades can be costly, and investing in newer technologies can include a certain level of risk and uncertainty. Understanding this, the main objection we hear repeatedly as we speak with property owners and building managers almost always comes down to cost. Whether it is the initial capital expense of purchasing the equipment or the related debt service and maintenance issues involved with advanced system modifications, money always seems to be the sticking point when it comes to moving forward.
It’s in the Contract
Well what if commercial property owners could have those system modifications installed having their savings guaranteed and insured while incurring no capital costs and with no risk? Energy Performance Contracts (EPC’s) make it possible to undertake these modifications while still enjoying significant savings and all the related benefits associated with “Going Green.” EPC contracts are essentially agreements with an Energy Service Company (ESCO) whereby the company assumes all costs related to purchasing, installing, and maintaining energy related improvements as part of a shared savings arrangement. The property owner receives a percentage of the energy savings as well as increasing the value of their property as a result of these improvements.
This model may be particularly attractive to the privately owned commercial market. The property owner assumes no risk or long term debt responsibilities. After a contract is signed, information on energy use and all previous Energy Conservation Measures (ECM’s) taken by the property owner are gathered and quantified. That information is entered into a proprietary software program that matches the data to a list of possible ECM’s and government subsidies/ programs available to that particular site.