What are energy performance contracts (EPCs)?

In Ireland, the journey toward energy efficiency and decarbonisation is gaining momentum, and businesses, public bodies, and property owners have a powerful tool at their disposal: Energy Performance Contracts (EPCs). These contracts, which guarantee specific energy savings or improvements, are beco

What is an energy Service Company (EPC)?

What is an EPC? An EPC is a long-term agreement between a client (typically a public or private sector entity) and an Energy Service Company (ESCO). The ESCO is responsible for implementing energy-saving measures such as upgrading heating systems, installing LED lighting, or integrating renewable technologies like solar panels and heat pumps.

What is an EPC contract?

An EPC Contract delivers these requirements in a single integrated package, which is one of the major reasons why EPC Contracts are the most common form of construction contract used in project-financed utility-scale solar projects. The key clauses in any construction contract are those that impact on time, cost and quality.

Should you choose an EPC contract for a solar project?

Given the significant monetary value of EPC Contracts, and the potential adverse consequences if problems occur during construction, the lowest price should not be the only factor used when selecting a Contractor. As noted earlier, an EPC Contract is one of a suite of agreements necessary to develop a solar project.

Do EPC contracts impose PLDs?

Most, however, do not impose PLDs. EPC Contracts impose PLDs because the achievement of the performance guarantees has a significant impact on the ultimate success of a project. Similarly, it is important the solar facility commences operation on time given the liability the Project Company will have under other project agreements.

What is a bankable EPC contract?

A bankable EPC Contract is a contract with a risk allocation between the Contractor and the Project Company to the satisfaction of Lenders and their credit committees.