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What are Guaranteed Energy Savings Programs?

Guaranteed Energy Savings programs were created to promote awareness and implementation of sustainable construction in public facilities. They have become more important as energy costs rise and budgets decline. The most common type of energy savings program for public entities is a Guaranteed Energy Savings Contract, or Performance Contract. A Guaranteed Energy Savings Contract is a contractual agreement between a qualified provider and public entity to reduce the energy and operating costs of a building through the implementation of energy conservation measures. 

Energy conservation measures can include installing new energy equipment, adding renewable energy to a building, and reprogramming energy controls to perform optimally and efficiently. Energy savings are calculated based on a benchmark year of building energy consumption before the project has been implemented by a qualified provider.

Once the project is implemented, the qualified provider monitors utility bills and energy consumption every month to ensure that everything is running correctly and efficiency levels are reached. If the actual energy savings do not match the energy savings that were promised, the provider will pay the difference and make any changes needed. Any additional savings achieved from the project go directly to the building owner.

With a Guaranteed Energy Savings Contract (GESC), owners can fund energy savings projects without a large upfront capital investment, as the energy savings from the project are used to pay for these costs. 

The more detailed the Guaranteed Energy Savings Contract is, the better. These documents should indicate exact numbers and figures for energy savings and production, along with clear promises for how the provider will keep up their end of the bargain. The rules and regulations regarding Energy Savings Contracts will vary somewhat depending on local laws. Be sure to check to see what stipulations are required by law within your state.

Installing Solar Power with a Guaranteed Energy Savings Contract

Renewable energy is an important consideration for guaranteed energy savings programs. Depending on local laws, solar power can often be installed as part of an energy savings performance contract or guaranteed energy savings contract. The process is slightly different, but the funding mechanism remains the same.

Contractors and engineers will assess the building and draw up an estimated system plan that includes costs for the panels, installation, and any remodeling needed on the structures. With a GES project, the promised amount of energy savings is also included in the contract to provide schools with an exact amount of power that will be generated by the solar system. This number can be used to estimate the power savings cost per month based on past usage.

These contracts provide schools and facilities the guarantee that their solar panel systems will provide the amount of energy needed to fulfill their power needs and contribute to a more sustainable building. It also ensures that the solar panel systems will reduce energy costs over time.


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