Check Out This Checklist BEFORE Signing An Energy Performance Contract

Want to replace end of life energy equipment and aging infrastructure to enhance the comfort, productivity and safety of your workers?

Hoping an energy performance contract will pay for the efficiency measures, but hesitant about the confusing contract jargon?

You should be. Sometimes energy services companies write the contract to protect them, not you.

Here’s some energy performance contract sample language that you should look for:

Guaranteed Energy Savings: Energy savings should be guaranteed by the energy services company with language that says if they don’t hit the predetermined mark, they will be on the hook for the difference. Also, in energy performance contract sample language, be weary of the term “stipulated savings” because this clause means that savings are agreed upon beforehand, not measured after the project is completed. This isn’t always a bad thing because sometimes the energy savings is pretty straight forward, and stipulating energy savings can help the customer avoid unnecessary measurement and verification costs. However, it is always important to understand the assumptions being used for stipulating energy savings.

A credible company should take the risk because they are implementing the measures that will guarantee the energy savings. Make sure you are not unnecessarily burdened with the risk of the project, but also not overpaying for measurement and verification that you don’t need.

Project scope: As the customer, you should be able to select the scope of the project and indicate how large or small you want it to be, even choosing parts a la carte if desired. Many of the larger energy services companies have minimum project sizes that they don’t tell you about. Look to team up with a company that will design customized solutions based on the customer’s needs. A good partner will want to learn how the space is being used, when it is used, and who is using it. Solutions should be presented to the customer who then can choose the measures desired based on their actual needs. Some energy service companies focus on energy system optimization which is an approach where designing the optimal environment for building occupants is balanced with maximizing energy savings and costs savings.

Also, make sure the energy service company is financially stable and vetted by the U.S. Department of Energy website.

Want more information about energy performance contract sample language? Click here to read about what you should look for and look out for when signing such a contract.


Share this article