Efficiency Services Agreement
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, Metrus pays 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 Metrus.
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.
- Metrus enters into the ESA directly with the Customer and pays a third-party contractor (energy service company, or ESCO) to engineer, implement and maintain the energy efficiency project.
- Metrus retains 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.
