Financing
The TEAM Initiative calls for the Department of Energy (DOE) to leverage alternative financing tools, such as energy savings performance contracts (ESPCs) and utility energy service contracts (UESCs), to fund the majority of TEAM projects. ESPCs and UESCs allow agencies to finance energy savings projects for up to 25 years using the savings gained from the project, with little to no up-front capital costs involved.
Energy Service Companies
Energy Service Companies (ESCOs) are businesses that develop, install, and finance projects that improve energy efficiency and reduce the costs of operation and management. ESCOs are different from other companies that deal in energy efficiency, because they work under performance-based contracts.
When an agency and an ESCO enter into an Energy Savings Performance Contract (ESPC), they agree that the ESCO will take on the costs of financing, installing, and maintaining the new energy-saving technology. The agency pays the ESCO back with the money saved in energy costs and, when the payment is complete, the agency keeps the additional cost savings.
The TEAM Initiative requires that ESCOs take on large-scale projects, on shorter-term deadlines, than they traditionally have. All ESPCs must be for terms shorter than 25 years, and are required to meet the TEAM Initiative requirements. At a minimum, all ESCOs should include the following in DOE site projects:
- Efficiency savings of no less than 30% reduction in energy intensity
- Water conservation measures to achieve no less than 16% reduction in water intensity
- Feasibility report for on-site renewable generation
- An advanced metering program covering all electric, thermal, and water consumption
- Environmental stewardship measures: recycling and waste diversion
- A pollution prevention opportunity assessment and implementation plan
- Operations and maintenance (O&M) protocols
- Strict monitoring and verification (M&V) protocols.
For more information about these requirements, see Section 2 of the TEAM Initiative Manual (PDF 63 KB). Download Adobe Reader.
