An Energy Services Agreement (ESA) is where an energy service company (ESCO) project manages the installation of energy-efficient equipment for a business. In some cases, they can guarantee savings from the equipment.
The business pays monthly instalments to the ESCO or a bank, to pay off the equipment over the agreement period.
How it works:
- Find an ESCO.
- The ESCO gets funding from a bank or financier, who pays for your energy efficiency upgrade.
- You make monthly payments to the ESCO or the financier.
- If you don’t get the savings you were expecting, the energy company will pay the shortfall.
- At the end of the agreement, you’ll own the equipment.
Always seek advice from your accountant.
An ESA is suitable for businesses that:
- have high energy-related costs
- own or have a long-term tenancy of their site
- are considering numerous energy-saving projects
- want to outsource the design, implementation and verification of the energy savings.
Read more about ESAs on the Sustainability Victoria website or contact an ESCO.