As today’s businesses juggle the costs of deferred maintenance, infrastructure needs, and sustainability commitments, many are finding that Efficiency as a Service (EaaS) is an effective way to meet the challenge.
Metrus Energy’s Efficiency Services Agreement (ESA) offers numerous financial advantages to commercial and industrial companies seeking to implement efficiency measures without the burdens of ownership. These include:
- Zero upfront capital expenditure
- Off balance sheet financing
- Charges only for realized energy and water savings
The Metrus ESA unlocks the potential savings of reduced energy, water, and maintenance demands, enabling businesses to focus their resources on their mission-critical activities while reaping the benefits of maintenance-free upgrades across campus.
The top five questions about the Metrus ESA
Is an ESA similar to a solar Power Purchase Agreement (PPA)?
Yes. Similar to a PPA, the ESA allows companies to achieve a wide range of efficiency improvements without upfront capital investment. ESA payments are performance-based and reflect actual savings. Service charges under an ESA (e.g., $ per kWh saved) are set at a level below a company’s current utility rate.
We have many projects competing for capital. Could an ESA help?
A Metrus ESA enables businesses to complete larger, more impactful efficiency projects (with longer paybacks) that might not otherwise receive funding. The ESA frees up capital for other pressing projects within the organization. And the ESA does not adversely impact a business’s future borrowing capacity or interfere with its existing bonds or loan agreements. It allows them to accelerate their sustainability achievements without impacting core operations.
What types of efficiency upgrades are eligible for an ESA?
An ESA can accommodate any building efficiency upgrade that generates savings for an organization, from the installation of new LED lighting and controls to the replacement of a boiler or chiller. The ESA is an open platform, which means it places no restrictions on the type of equipment or technology included in an efficiency upgrade. Metrus’ current portfolio of ESA projects includes over 30 different types of efficiency improvements.
Is an ESA off balance sheet?
The ESA delivers efficiency as-a-service, which is fundamentally different than an on-balance sheet loan or a lease. Key factors in the accounting review of ESAs include: (1) Metrus invests its own capital into each project and is the long-term owner of the energy and water efficiency assets, (2) ESA payments fluctuate based on realized savings (just like your campus utility bill which goes up/down based on your energy use), and (3) Metrus controls and directs how the efficiency measures are designed, implemented and operated, and is paid for the economic benefits (e.g., energy savings) generated by the project.
How are savings measured?
Savings calculations are based on three key factors: (1) pre-project measurements of the efficiency of existing equipment; (2) post-project measurements of the efficiency of newly installed equipment; and, (3) fixed baseline parameters such as facility operating hours and degree days. Savings measurements occur throughout the ESA term to calculate the units of avoided energy (“negawatts”) and water use resulting from the project. Measurements are isolated to the equipment financed under an ESA so as not to overlap with other ongoing sustainability initiatives.
Metrus Energy is a proud partner in the effort to fight climate change through sustainable energy practices. We’ve pledged to fund $100 million in energy efficiency transactions as part of the We Are Still In initiative to combat climate change. We’ve also increased a similar commitment to the Better Buildings Challenge to $175 million.