The Efficiency Services Agreement (ESA) is a pay-for-performance financing solution that allows customers to implement energy efficiency projects without any upfront capital expenditure. Through the ESA, Platinum and our finance partners pay for all development and construction costs. After a project is operational, the customer uses a portion of the cost savings associated with reduced energy consumption to make periodic service payments to our finance partner.
Like a typical utility bill, the ESA service payments are based on a measured quantity of energy units, i.e. kilowatt-hours of electricity and therms of natural gas. However, ESA service payments are based on energy units that are saved, enabling customers to treat energy efficiency as a resource that improves their bottom line and mitigates the environmental impact of their business. The price per unit of energy savings is an output-based charge that is set at or below existing utility prices, resulting in reduced operating expenses.
- We enter into the ESA directly with the Customer and pay to construct, engineer, implement and maintain the energy efficiency project.
- Our finance partners retain ownership of all project-related assets for the duration of the ESA term and pays for associated maintenance services to ensure long-term reliability and optimal performance.
- In each billing period, the performance of the project will be quantified using agreed-upon measurement and verification (M&V) protocols. These verified savings provide the basis for the ESA service charge.
- After the ESA term expires, the customer has the option to purchase the equipment at fair market value.