Making your buildings energy efficient — contractual and commercial considerations

An energy performance contract (EPC) is a contractual and funding mechanism that provides energy efficiency retrofit to a building to improve its energy performance while minimising risk to the building’s owner. Any upfront capital investment is recouped through energy cost savings over a period of time, usually between seven and 20 years. The contractor is generally termed an energy service company (ESCO), but in sustainable infrastructure projects the term multi-utility service company (MUSCO) is also used.

Commonly used in the US, the use of EPCs is gaining ground in both the UK and the EU. The European Commission raised the potential for EPCs in its draft Energy Efficiency Directive and within the final directive imposed a requirement on all member states to introduce a framework of measures to promote energy efficiency (to be implemented into national law by 5 June 2014)…

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