What is ESPC and UESC performance contracts?
ESPC and UESC performance contracts are ways to fund energy and water improvements from the savings they produce. In an Energy Savings Performance Contract, an energy service company designs, finances and installs measures and guarantees savings. In a Utility Energy Service Contract, a utility provides similar services. Savings must be measured and verified.
What it is
Performance contracts let public agencies and other owners upgrade facilities without large up-front capital. The contractor finances the work, and the owner repays it over the contract term from the reduced utility costs.
In an ESPC, the energy service company guarantees a level of savings, and measurement and verification confirms whether the guarantee was met. A UESC is arranged with the serving utility, and its structure and guarantees depend on the agreement.
Because payments depend on savings, M&V is central. Plans usually follow IPMVP options and federal M&V guidelines, with baselines agreed before work begins.
Who it applies to
Federal, state and local agencies, schools, universities, hospitals and other owners who want to fund upgrades from savings. US federal agencies use them under specific statutory authority and program rules.
How it is measured
M&V compares measured performance with an agreed baseline across the contract term.
- An agreed baseline and adjustment method
- The M&V option chosen for each measure
- Periodic measured performance reports
- Reconciliation against the guaranteed savings
How Aqueduct helps
Measurement and verification is the Verify step in Aqueduct: a baseline modeled before the claim and savings confirmed at the meter.
- aQ EnergySmart weather-normalized baselines agreed before measures go in
- Continuous meter data that shows savings during the term, not only at reporting time
- Fault detection that protects savings when equipment drifts
- aQ Assurance reports the owner and reviewer can check against the contract