by Shane Henson — April 2, 2012—The U.S. General Services Administration has launched the Deep Retrofit Challenge, an initiative to achieve deep energy savings, and announced that 30 of its federal buildings, totaling nearly 117 million square feet, are participating in this effort to reduce energy costs.
The Deep Retrofit Challenge is asking energy service companies to make these 30 buildings more energy efficient through the use of Energy Service Performance Contracts (ESPCs).
ESPCs retrofit buildings for guaranteed greater energy performance at no net cost to taxpayers, explains GSA. The retrofit projects are paid for through energy savings over time. An ESPC is an agreement between a federal agency and an energy service company. The energy service company conducts a comprehensive energy audit for the federal facility and identifies improvements to save energy.
There are 16 energy service companies that are pre-approved by and under contract with the U.S. Department of Energy to bid on these projects. The energy service companies will consult with GSA on the designs and constructs a project that meets GSA’s needs and arranges the necessary funding.
The energy service company guarantees that the improvements will generate energy cost savings sufficient to pay for the project over the term of the contract. After the capital is paid back, all additional cost savings accrue to GSA. The energy service company bears the risk if their improvements do not generate the projected savings. Contract terms up to 25 years are allowed.
Retrofit projects at these buildings will contribute to the goals of the Presidential Memorandum on the implementation of energy savings projects and performance-based contracting.
In December, President Obama directed federal agencies to enter into at least $2 billion in performance-based contracts over the next two years to achieve substantial energy savings and to create jobs. Additionally, through the U.S. Department of Energy’s (DOE) Better Buildings Challenge, more than 60 private companies, hospitals, cities, states, colleges have collectively committed to $2 billion in energy efficiency retrofits to 1.6 billion square feet of property.
