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Energy Service Company

EcoGeneration Solutions, LLC. is an "energy service company."  We provide turnkey energy management design and project development solutions that provide our customers with energy savings through increased efficiencies and decreased power and energy costs.  We also offer other energy-saving technologies that include; absorption chillers, cogeneration, trigeneration Demand Side Management or other Energy Conservation Measures.  

Unlike most companies, we are equipment supplier/vendor neutral. This means we help our clients select the best equipment for their specific application. This approach provides our customers with superior performance, decreased operating expenses and increased return on investment. 

Our company provides turn-key project solutions that include all or part of the following: 

  • Engineering and Economic Feasibility Studies 
  • Project Design, Engineering & Permitting
  • Project Construction
  • Project Funding & Financing Options
  • Shared/Guaranteed Savings program with no capital requirements. 
  • Project Commissioning 
  • Operations & Maintenance 

For more information: call us at: 832-758-0027

What is an Energy Service Company?

EcoGeneration Solutions, LLC., is an Energy Service Company.  An Energy Service Company (ESCO) is a business that provides energy management services to an energy user. Services provided by an ESCO may be contracted through an Energy Services Agreement or through specific energy management solutions identified by the ESCO that provides the best return on investment for the customer. 

* What is Energy Performance Contracting?

Here’s how it works:

You enter into an agreement with a private energy service company (ESCO). The ESCO will identify and evaluate energy-saving opportunities and then recommend a package of improvements to be paid for through savings. The ESCO will guarantee that savings meet or exceed annual payments to cover all project costs—usually over a contract term of seven to 10 years. If savings don’t materialize, the ESCO pays the difference, not you. To ensure savings, the ESCO offers staff training and long-term maintenance services.

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Many types of building improvements can be funded through your existing budgets— new lighting technologies, boilers and chillers, energy management controls and swimming pool covers, to name a few.

What is an Energy Performance Contract?

An Energy Performance Contract is a financing or operating lease provided by an Energy Service Company (ESCO) or equipment manufacturer. What distinguishes these contracts is that they provide a guarantee on energy savings from the installed retrofit measures, and they usually also offer a range of associated design, installation, and maintenance services. The contract period can range from 5 to 10 years, and the customer is required to have a certain minimum level of capital investment (generally $200,000 or more) before a contract will be considered.

Under an energy performance contract, the ESCO provides a service package that typically includes the design and engineering, financing, installation, and maintenance of retrofit measures to improve energy efficiency. The scope of the improvements can range from work that affects a single part of a building's energy-using infrastructure (such as lighting) to a complete package of improvements for multiple buildings and facilities. Generally, the service provider will guarantee savings as a result of improvements in both energy and maintenance efficiencies. Flat-fee payments tend to be structured to maintain a positive cash flow to the customer with whom the agreement is made. With the increasing deregulation of conventional energy utilities, several larger utilities have formed unregulated subsidiaries that offer a full range of energy efficiency services under performance agreements.

An energy performance contract must define the methodology for establishing the baseline costs and cost savings and for the distribution of the savings to the parties. The contract must also specify how the savings will be determined and address contingencies such as utility rate changes and variations in the use and occupancy of a building. While several excellent guides exist for selecting and negotiating energy performance contracts, large or complicated contracts should be negotiated with the assistance of experienced legal counsel.


A qualified ESCO can help you put the pieces together:

puzz1.gif (234 bytes)Identify and evaluate energy-saving opportunities;

puzz2.gif (253 bytes)Develop engineering designs and specifications;

puzz3.gif (280 bytes)Manage the project from design to installation to monitoring;

puzz4.gif (243 bytes)Arrange for financing;

puzz5.gif (248 bytes)Train your staff and provide ongoing maintenance services; and

puzz6.gif (244 bytes)Guarantee that savings will cover all project costs.

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The Many Benefits of Energy Performance Contracting:

Better Buildings

By updating or replacing equipment that is old and obsolete with newer, more efficient technologies, you will have higher-quality systems, fewer breakdowns and reduced maintenance.  When building occupants experience improved lighting, better air quality and more comfortable room temperatures, they are likely to be happier and more productive.

A Wise Investment

Energy performance contracting allows you to divert funds that would be spent on energy bills into investments in your buildings. For governments, this means limited budgets can stretch further, putting taxpayers' money where it really counts. For all building owners, more modern, efficient energy systems can increase your property value and improve marketability of your buildings.

Improvements Without Sacrifice

Energy performance contracting allows you to tackle energy efficiency projects now even if no funds are available. This means you can still afford improvements when faced with budget cuts or competing priorities. And, with energy performance contracting, you can take a comprehensive approach that will optimize your benefits.

Cost Savings

New systems and equipment can lower your energy costs.  Many building owners see energy savings of 15 to 35 percent and also reduce their long-term maintenance costs. You keep all the savings once the equipment is paid off, plus any excess savings during the contract term.

Proven Technology and Expertise

Since the late 1970s, performance contracting has become a widely accepted and reliable way to make energy improvements. Today's ESCOs use industry-standard practices and proven energy-saving technologies and have excellent track records for satisfying their customers. ESCOs have a financial incentive to make sure savings are achieved throughout the contract term.

One-Stop Shopping

Performance contracting offers a streamlined approach to making facility improvements because, with a single contract, you can tackle multiple energy-efficient projects throughout your facility, rather then doing one project at a time. Your ESCO can provide a full range of services and continue working with you once the projects are complete to ensure that you get optimal long-term energy performance.

Energy Service Companies: Cost-Savings Partners for Industry

As electric utilities transform themselves to meet the changing marketplace, energy users must learn a new lexicon of acronyms and abbreviations. Enterprises such as ESPs, LDCs, ISOs, PXs, UDCs, RESCOs, DISCOs, Transcos, and ESCOs operate alongside traditional electric utilities. Of these, the ESCO, or energy service company, may be the least understood, since it offers services historically outside the domain of regulated electric utilities. ESCOs also provide the broadest range of services to energy users.

Energy Services Offered by Various Types of Providers
Energy Services ESCOs Vendors Contractors A&E Design/Build Firms Consultants
Energy Audits X   X X X
Engineering Design X   X X X
Equipment Installation X X X X  
Construction and Project Management X   X X  
Performance Monitoring and Verification X       X
Performance Guarantees X        
Commissioning and O&M X X X X  
Financing X X      
Integrator X X      
Source: Goldman and Dayton.

The ESCO is the only type of energy services provider whose compensation depends upon energy savings. This is the "shared savings," or "performance-based" contract where the ESCO retains a portion of the value of the saved energy as compensation.

ESCOs that concentrate their efforts within the industrial sector tend to differentiate themselves by focusing within specialized industries, such as textiles or petroleum refining.

ESCO Services
ESCO projects often employ a variety of measures and technologies to achieve energy savings, including:

  • High-efficiency lighting
  • High-efficiency heating and air conditioning
  • Efficient motors and variable speed drives
  • Centralized energy management systems

ESCOs generally act as project developers and assume much of a project's risk. Typically, they offer these services:

  • Develop, design, and finance energy efficiency projects
  • Install and maintain energy-efficient equipment
  • Measure, monitor, and verify the project's energy savings
  • Assume the risk of guaranteed energy savings1

For manufacturing facilities with significant motor-related end uses, there are potentially large energy saving opportunities through motor system and pump system upgrades. However, resources such as time, expertise, and capital are often not available to facility management for energy efficiency projects. In addition, management may be more concerned with increasing productivity and reliability than reducing energy costs.

Energy consumers tend to look for comprehensive solutions to their operating situation instead of just energy savings. While the effort may concentrate on energy efficiency improvements, there are usually collateral improvements in reliability, process control, environmental compliance, and increased productivity associated with it.

Project Funding
One of the greatest benefits of the performance-based contract is that the ESCO supplies the project funding, which relieves the company of paying up-front capital costs. This makes the ESCO a valuable partner for facility management and ownership. In return for providing the up-front capital, the ESCO receives some portion of the measured savings that result from the project over a number of years.

Who is at Risk?
Clearly, there is risk associated with performance-based contracting, and there are many ways the ESCO and customer can share that risk. Typically, the ESCO shoulders much of the risk, since the ESCO estimates energy savings a priori and determines whether the savings will repay their investment. However, if the customer does not operate the project as planned, then energy savings will be less than forecasted and payback will be delayed. The same is true if the ESCO overestimates savings, even if the customer operates the project as planned. Thus, ESCOs have led the effort to measure and verify, rather than simply estimate energy savings.

When the customer is responsible for operating the equipment, the ESCO must train operating personnel in the principles of energy efficiency and proper operation. Training is also valuable to the customer, who could assume some risk if energy savings do not meet forecasts.

Frequently Asked Questions

How do I find those energy savings?

By working in partnership with a professional energy service company (ESCO), you can tap its expertise to determine what building improvements make the most sense for improved comfort, easier maintenance and your budget. An ESCO's recommendations might include replacing lighting equipment, modifying or replacing boilers and chillers, installing modern energy management control systems, replacing motors or even installing pool covers or more efficient kitchen equipment.

Can't I do this myself?

Sure, if you have the time, money and expertise. But an ESCO can work with you to put together a complete package of services that meets your needs and saves you time and money. An ESCO can identify and evaluate energy-saving opportunities, provide engineering services, order and install equipment, and manage all phases of construction. To complete the package, the ESCO can guarantee the savings and even arrange financing.

How risky is this for me?

ESCOs typically work under a performance guarantee that shifts the risk to the ESCO. Your guaranteed energy savings pay for the upgrades, so you have no up-front costs. If energy savings don't materialize, the ESCO pays the difference, not you.

For more information on Energy Service Company services, call the experts at: 832-758-0027

* From the Department of Energy website with permission