Qualified ESCOs

Energy service companies play a vital part in making energy-saving projects possible for Federal agencies. These private-sector partners in FEMP's Super Energy Savings Performance Contract Program contribute their expertise and experience with government contracting.

This "ESCO Center" section contains information about ESCOs, including Super ESPC and DOE Qualified ESCO lists and details for ESCOs on how to become a qualified ESCO.

What Is an ESCO?

An ESCO, or energy service company, is a business that develops, installs, and finances projects designed to improve energy efficiency and reduce operations and maintenance costs for its customers' facilities. ESCOs generally act as project developers for a wide range of tasks and assume the technical and performance risk associated with the project. What sets ESCOs apart from other firms that offer energy efficiency improvements is the concept of performance-based contracting. When an ESCO undertakes a project, the company's compensation is directly linked to the amount of energy that is actually saved.

The comprehensive energy efficiency retrofits inherent in ESCO projects typically require a large initial capital investment and may offer a relatively long payback period. The customer's debt payments are tied to the energy savings offered under the project so that the customer pays for the capital improvement with the money that comes out of the difference between pre-installation and post-installation energy use and other related costs.

Note: This definition is based on "What is an ESCO," by NAESCO (National Association of Energy Service Companies), used by permission.

FEMP's ESCO Partners

Energy service companies are FEMP's partners in two capacities: