According to the National Association of Energy Service Companies (www.naesco.org), an Energy Service Company (or ESCO), is a business that develops, installs, and arranges financing for projects designed to improve the energy efficiency and maintenance costs for facilities over a seven to twenty year time period. ESCOs generally act as project developers for a wide range of tasks and assume the technical and performance risk associated with the project. Typically, they offer the following services:
• develop, design, and arrange financing for energy efficiency projects;
• install and maintain the energy efficient equipment involved;
• measure, monitor, and verify the project’s energy savings; and
• assume the risk that the project will save the amount of energy guaranteed.
These services are bundled into the project’s cost and are repaid through the dollar savings generated.
ESCO projects are comprehensive, which means that the ESCO employs a wide array of cost-effective measures to achieve energy savings. These measures often include the following: high efficiency lighting, high efficiency heating and air conditioning, efficient motors and variable speed drives, and centralized energy management systems.
What sets ESCOs apart from other firms that offer energy efficiency is the concept of performance-based contracting. When an ESCO undertakes a project, the company’s compensation, and often the project’s financing, are directly linked to the amount of energy that is actually saved.
Most performance-based energy efficiency projects include the maintenance of all or some portion of the new high-energy equipment over the life of the contract. The cost of this ongoing maintenance is folded into the overall cost of the project. Therefore, during the life of the contract, the customer receives the benefit of reduced maintenance costs, in addition to reduced energy costs.
Included in the ancillary services provided in a typical performance-based energy efficiency contract are the removal and disposal of hazardous materials from the customer’s facility. When, for example, existing fluorescent lighting equipment, ballasts that contain PCBs, and fluorescent light tubes that contain traces of mercury are replaced, the old equipment must be disposed of as hazardous waste.
In sum, Aelux is an ESCO because we prefer the business of longterm energy conservation partnerships over that of the come and go lighting installer. More information about our commitment is available at the Lighting Retrofit Guidelines page.
