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Project Financing

Financing Energy Efficiency Projects


Energy projects are capital-intensive, but most customers have capital constraints that limit their ability to fund energy initiatives. These projects must compete - often unsuccessfully - with other business priorities. Quality Energy can provide up-front financing for efficiency improvement projects, retrofits and upgrades, with costs being paid from the financial savings achieved.

Approaches to financing energy efficiency projects are as varied as the needs they are trying to address. There are energy services performance contracts where guaranteed savings will meet or exceed annual payments to cover the project costs. Lease-purchase agreements and shared savings plans are also effective in achieving positive cash flow projects. Additionally, there are Federal and State tax credits and incentives for companies that implement more efficient energy systems.

Using an Energy Performance Contract

Quality Energy will design, install, finance and manage energy efficient systems in a customer's facility using the realized energy savings to pay for the cost of the project. Quality Energy will enter into a performance contract with the client that will guarantee the amount of savings to be achieved at the facility. These contracts typically run from three to ten years, the length of time depending upon the:

- Project complexity
- Project type
- Savings payback period
- Local legislation

A baseline consumption profile is determined using past energy bills, and then savings are calculated using the actual energy bills received throughout the contract period. Usually both parties agree to monitor the savings on a regular basis--that way midcourse adjustments can be made and performance improved. Performance contract projects must be of sufficient size such that the savings generated by the project cover its costs over the length of time specified in the contract. Aggregating smaller projects into a single contract is a way to create the critical mass necessary to make performance contracting a viable option.

Lease-Purchase

Quality Energy offers lease purchase agreements as a means of reducing the costs of energy efficient equipment and services. These leases are designed so that the energy savings actually pay the financing charges. Leases in which the lessee assumes ownership typically range from 3 to 10 years.

Shared Savings

Our Shared Savings program is a form of financing which allows you to implement high-efficiency easily justifiable projects with no up-front expense. Quality Energy purchases and installs the efficiency improvement equipment. A portion of the energy cost savings achieved by implementation is paid to us over an agreed upon term to cover the cost of the initial investment. The balance of the savings is retained by your organization (i.e.., the owner), creating an immediate boost to cash flow. When the term concludes, you keep the equipment and retain 100% of the savings. Quality Energy offers a variety of financial vehicles in order for our customers to initiate projects and reap the savings opportunities.

Federal and State Tax Incentives for Energy Efficiency Projects

There are many Federal and State tax incentives offered for manufacturers that invest in energy efficiency improvements for their operations.

Click here for a list of State Energy Offices


To contact a Quality Energy representative for a consultation click here.

 

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