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Energy Performance Contracting

  • By: Amanda Harmon Cooley
  • In: Green Business: An A-to-Z Guide
  • Edited by: Nevin Cohen & Paul Robbins
  • Subject:Sustainability, Environmental Policy & Law (general)

Energy performance contracting, also known as energy savings performance contracting, is a contractual and financing arrangement, typically negotiated between a building owner and an energy service company, whereby future energy cost savings compensate the building owner for current energy conservation and efficiency improvements and additions. Energy performance contracting is an important innovation for green business as it provides an alternative method of financing crucial efforts toward sustainable development. Under a typical energy performance contracting agreement, the energy service company completes a comprehensive review and energy audit of the current status of the real property. Thereafter, the energy service company provides an integrated recommendation for implementation of energy-efficient measures for the property. These additions and modifications might include sustainable construction; energy effectiveness and efficiency; electric, water, ...

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