Energy Service Company (ESCO)

A company that offers to reduce a client's energy costs, often by capitalizing the upfront expenditures and sharing the resulting future cost savings with the client. This is typically accomplished through the use of an energy-performance contract (EPC) or a shared-savings agreement.

ESCOs may offer any of the following services: financing, design & installation, project management, education services, equipment leasing, maintenance, and verification & auditing. They originally established a foothold under the regulated utility structures by helping large organizations reduce energy consumption.

Also known as energy efficiency service providers , ESCOs are important to sustainability in that they enable companies that normally could not afford the upfront investment costs, to become more efficient, more profitable, and reduce their environmental footprint. A true win-win-win if successfully implemented.

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