Energy Performance Contracting

A Financing Tool for Public Facility Improvements

The Colorado Energy Office’s (CEO) Energy Performance Contracting (EPC) is a creative model for financing and implementing capital improvement projects. It allows eligible applicants to implement energy conservation and renewable energy measures with little or no upfront cost investment. The resulting utility and maintenance cost savings are then used to pay for the improvements and fund facility maintenance and upgrades. The sooner you get started on a project the sooner you will be avoiding utility costs and will be prepared to access grants and other funding which can help pay for the project.

To date, the EPC Program has:

Invested $846 million into facility improvements
Achieved 292 million kWH in annual electricity savings
Saved $52 million in annual costs for public jurisdictions

What is Energy Performance Contracting?

Colorado’s Energy Performance Contracting Program will identify capital improvement and cost saving opportunities and provide solutions for capital and financing. The program’s goal is to help communities achieve their goals through reduced energy use and operational costs.

The first step is to enter into an Investment Grade Audit (IGA) contract with an Energy Service Company (ESCO) to create the project. The IGA will develop a project that will have a guaranteed maximum price which the ESCO will then implement under the energy performance contract. The ESCO conducts an IGA of facilities by reviewing utility bills, doing site visits, and working with you to help meet your goals of cost savings, sustainability, and resilience. The ESCO then delivers a project proposal that includes recommendations for:

Energy and water efficiency measures

Renewable energy systems

Electric vehicle technology

Operations & maintenance and metering upgrades

With the stream of income from cost savings or renewable energy produced, the project repays itself over the contract term.
Read our Fact Sheet for More Information

Eligible Applicants

Energy Performance Contracting is available to:

Local governments

Special districts

School districts

Institutions of higher education

State Agencies

Some criteria for action include:

High utility costs

Capital improvement/deferred maintenance needs

Sustainability and climate action goals

How it Works

Colorado's Energy Performance Contracting

Contact the Colorado Energy Office.
Our EPC team will help you determine if Energy Performance Contracting is an appropriate tool to meet your needs. If so, we will get the process started.

Select a pre-qualified Energy Service Company (ESCO).
You may select from a list of pre-qualified ESCOs or procure your own.

Contract for an Investment Grade Audit (IGA) with the ESCO.
Your ESCO will conduct a detailed assessment of your portfolio of buildings, then recommend improvements to save energy and money and identify funding and financing opportunities.

Develop and implement an Energy Performance Contract (construction).
Work with CEO to develop a contract that meets your needs and requirements. After the contract is executed, construction can begin. Your ESCO will see that facility improvements are installed as planned.

Measurement and Verification.
Now it’s time to realize your energy cost savings. Your ESCO will verify savings through a measurement and verification process and will summarize results in an annual report.