Info

$32,159

$32,159

$32,159

$32,159

$32,159

$32,159

Table 43-8 Analysis of Energy Cost Savings Project Financed Under a Shared Savings Arrangement.

Table 43-8 Analysis of Energy Cost Savings Project Financed Under a Shared Savings Arrangement.

bundled into the overall project financing package.

A performance contractor/manager may be selected to manage the entire project for a given fee or for a percentage of the total construction cost. The contractor/manager can bid out the project on behalf of the facility through a series of performance-based contracts, requiring some type of savings guarantee as well as ongoing OM&R agreements. Financing packages can also be bid. In addition, the contractor/manager may also provide an extensive savings verification program and/or bring in a third-party savings insurance policy.

By bundling these features with the relatively low-cost debt, the project package more closely resembles a performance-based/shared savings package, though less comprehensive and less costly. Savings guarantees, however, will only be as secure as the stated obligations and the capabilities and balance sheet of the party offering the guarantee. Moreover, third-party savings insurance policies should be viewed cautiously, as they may be more limited than the guarantees that an ESCo implementing the turnkey work would be willing to offer.

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