Energy Performance Contract is where a service provider installs energy efficiency equipment for a business and guarantees a return on investment. The business pays it back over time. The service provider may pay for the installation.
Stay in control of your finances
- Guaranteed savings by the energy service company.
- Long payment period of 4–15-year contract with a 3–9-month agreement period.
Potential tax benefits
- You may be able to claim tax on depreciation and interest on your repayments.
On the balance sheet.
Suited to big businesses with high-energy use
- Energy provider installs equipment of more than $500,000 in value.
- You own the equipment.
- Ownership or long-term tenancy of sites is required.
- The energy service company manages the whole process for you.
- Projects often involve replacing old equipment for new energy efficient equipment.
How it works
- Find an energy service company (ESCO). A good place to start is the Energy Efficiency Council’s list of providers.
- The energy company gets funding from a bank or financier, who pays for your energy efficiency upgrade.
- You make monthly payments to the energy company or the financier.
- If you don’t get the savings you were expecting, the energy company will pay the shortfall.
- At the end of the agreement, you’ll own the equipment.
It’s advised to always seek advice from your accountant.
For a list of simple tips to save energy in your business, visit the Victorian Energy Saver website.