Third Party financers for energy projects are referred to as “Energy Service Companies,” or ESCOs. ESCOs are businesses that design, build, install, finance, and maintain projects designed to provide energy through energy generation and/ or reduced demands.

Generally, the types of ESCOs are:

• Utility owned subsidiaries
• Service arms of energy equipment manufacturers
• Independent energy companies
• Energy marketers

The services can be provided through Energy Saving Performance Contracts (ESPCs) or Independent Energy Producer (IEP) arrangements. The ESPC arrangement is a contract for specified energy services, such as distributed generation power production and energy efficiency measures. The IEP arrangement is a purchase of energy, similar to the purchase of energy from the local utility franchise.

The approach described here is the IEP arrangement where the ESCO designs, builds, finances, and operates the solar energy systems.

You could finance it through an ESPC arrangement. To do so, you will have to adapt a ESPC agreement to your purpose.

For more detailed information on Energy Service Companies (ESCOs) and the various means of contracting for energy services, two resources developed for energy efficiency projects can also be helpful with your solor pool project:

Rebuild America: Financing Energy Efficiency in Buildings http://www.eere.energy.gov/financing/smallbus.html
(Chapter 3 Energy Savings Performance Contracts)

Practical Guide to Savings and Payments in Super ESPC Delivery Orders, January 2003, Oak Ridge National Laboratory.
http://www.eren.doe.gov/femp/financing/espc/practical_guide.html

Finding an ESCO partner

A good source for prospective ESCOs for your project is:

National Association of Energy Service Companies/ NAESCO
www.naesco.org (“Finding a Provider”)

In addition, the California Energy Commission has published a guide to selecting an ESCO. This publication, “How to Hire an Energy Services Company,” is available at http://www.energy.ca.gov/reports/efficiency_handbooks/index.html

Terms of Contract

As ESCOs can assume a wide range of project tasks; they can also assume a wide range of technical and performance risks associated with the project. Thus, the key to the successful use of this mechanism is a well-thought out contract that specifies risk, return, and responsibility. Although the above ESCO resources discuss these issues in more detail, the general terms of the contract include:

Key Contract Terms and Issues (Components of Agreement)

1.Contract | 2.Scope of Work Schedule | 3.Assured Performance Gurantee Schedule | 4.Planned Service Agreement Schedule | 5.Term and Payment Schedule

2. Scope of Work (summary listing of work to be done)

3. Assured Performance Guarantee Schedule

4. Planned Service Agreement

a.	Term
b.	Price
c.	Scope of Service
d.	Extended Service Options for Premium and Prime Coverages
e.	Term and Automatic Renewal
f.	Warranty
g.	Customer Obligations and Commitment
h.	Access
i.	Exclusions
j.	Indemnity
k.	Limitation of Liability
l.	Asbestos and Hazardous Equipment
m.	Renewal Price Adjustment