Energy Performance Contracting

Energy performance contracting is an alternative financing approach for investing in energy conservation for existing buildings. By partnering with an energy service company (ESCO), a facility owner can use an energy performance contract to implement facility upgrades that result in energy savings. The energy savings are intended to cover the cost of the upgrades. A measurement and verification (M&V) plan is established during the project’s development stage to ensure the energy savings are achieved. There are several guidelines for measuring energy savings, one of the most prominent being the International Performance Measurement and Verification Protocol (IPMVP).

Delaware's Energy Performance Contracting Act grants the State the ability to enter into energy performance contracts. As a requirement, the projected savings must cover the cost and the payback term cannot exceed 20 years. In addition, the savings must be measured and verified for the duration of the term.

The Office of Management and Budget provides guidance and procedures for evaluating and selecting energy performance projects.

Through a partnership with the Delaware Sustainable Energy Utility (DESEU), the State developed a program to streamline the energy performance contracting process for State executive branch agencies, school districts, and higher education. The program utilizes the DESEU’s funding vehicles and technical resources, and it includes a guidebook with a flow chart, standardized documents, and a 10 percent net savings requirement. The program also provides guidance on the selection, implementation, and approval procedures, all of which are outlined in the guidebook.

Below is a link to the guidebook. Please contact DFM or the DESEU to get the latest form documents and set up a meeting to discuss the program.