Governments are beginning to ramp up construction projects at the local, state, or federal levels as new infrastructure dollars are starting to roll in. Schools and educational facilities especially will be beneficiaries of new programs, including $3 billion in federal financing available through the Innovative Clean Energy loan guarantee program. No matter the scope of work, real estate owners and primary contractors are looking to deliver or even exceed their outlined energy performance goals while obtaining maximum value for the taxpayer.
To accomplish these dual objectives, several entities have embraced performance contracting to pay with savings generated through measured improvements in the energy efficiency of the completed project. Project financing is covered by the contractor, who can also be the Energy Service Company (ESCO), who recoups their investment with monthly payments determined by the energy savings after the project is complete. The payment terms are negotiated with the owner including percentage of the savings and length of time payments are made. The potential to create win-wins where the owner improves environmental performance at no cost and the contractor earns substantial margins through payments made with the energy savings is very real. Here is how it works.
SMACNA has created a portal on its website to help member contractors better understand the market opportunities as well as the process it takes to become an ESCO and participate in this market.
As more funds are being diverted towards public works projects, governments will be under increased pressure to ensure that any project obtains maximum energy savings.
To learn more about performance contracting and how it can benefit SMACNA contractors, click here.
