An energy service company or energy savings company (ESCO or ESCo) is a commercial or non-profit business providing a broad range of energy solutions including designs and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation and energy supply, and risk management.
Energy service companies (ESCOs) develop, design, build, and fund projects that save energy, reduce energy costs, and decrease operations and maintenance costs at their customers’ facilities. In general, ESCOs act as project developers for a comprehensive range of energy conservation measures and assume the technical and performance risks associated with a project.
ESCOs are distinguished from other firms that offer energy-efficiency improvements in that they use the performance-based contracting methodology. When an ESCO implements a project, the company’s compensation is directly linked to the actual energy cost savings.
While there are many different variations in the specific approaches to energy service performance contracts, these can generally be characterized into two basic types of agreements – “Shared Savings” and “Guaranteed Saving”. In both models, the Energy Service Company (ESCO) provides the complete range of implementation services and generates energy and cost savings. The differences are in the manner in which the project is financed, payments are made from the host facility to the ESCO, and energy and cost savings are allocated between the ESCO and the host facility.
List of 94 Energy Service Companies (ESCOs) (impaneled with BEE with validity till 30th March, 2017) can be found here-