As cities, schools and companies face funding challenges, many are exploring energy savings performance contracts. Here’s why independent experts say the choice of who to partner with is clear.
As cities, schools and companies look for new ways to fill budget gaps in these challenging times, many are exploring partnerships with an energy service company (ESCO). But with multiple companies out there, which should they choose? And why?
Global research firm, Guidehouse Insights, has made answering that question a whole lot easier. For the second time in a row, the firm has named Schneider Electric the top energy service company.
A big reason Schneider Electric came out on top is its ability to address the current needs of customers, the Guidehouse authors said — especially when it comes to the key funding mechanism such as energy savings performance contracts (ESPCs). These type of partnerships allow entities to fund projects using guaranteed energy savings. And as leaders look for new revenue streams in these challenging times, these funding models are more important than ever as they allow entities to make infrastructure improvements with existing budgets and immediately lower operational costs.
According to Guidehouse, what also sets Schneider Electric apart is the ESCO’s breadth of financing strategies beyond ESPCs, including subscription and service agreements, PPAs, and portfolio-wide guaranteed shared savings agreements. In 2019, Guidehouse also named Schneider Electric the leader in the Energy as a Service model.
“Energy and sustainability managers within and outside of traditional energy savings performance contract (ESPC) customer segments are looking for cost-effective, customized, and comprehensive energy solutions to meet their sustainability, infrastructure, and operational efficiency needs,” the Guidehouse report stated. “To meet these new energy management needs, energy suppliers and vendors are introducing a broader set of turnkey, portfolio-wide, sector-specific technical solutions and transaction financing instruments. These new options can transcend the historical single-site or campus-wide energy efficiency project approaches traditionally deployed by ESCOs using ESPCs.”
Forward-thinking city uses energy savings to fund master plan initiatives.
Helping Organizations Prepare Today to Get the Most Funding Tomorrow
With expertise in energy management, renewables, microgrids, building automation, funding and innovation, Schneider Electric can help clients not only develop new revenue streams, but also create long-term infrastructure plans that prepare them for the future.
“Being named the leading energy service company validates the value we bring to our clients by enabling communities, school districts, higher education and federal agencies to modernize energy infrastructure and technology, boost sustainability performance and solve complex financial challenges,” says James Potach, Senior Vice President for Schneider Electric’s Energy and Sustainability Services. “We’re always looking for opportunities to innovate and help our clients change their view on energy, from costly budget item to strategic asset. And as more public entities start to feel the reality of economic hardships, they will rely on the creativity and expertise of energy management to find ways to innovate energy and infrastructure design, digital capabilities and financial models to modernize schools, cities, and more during this economic downturn.”
Creating budget-neutral solutions, lowering operational costs, finding new revenue streams and reducing risk are more critical than ever. And as Congress considers trillion-dollar infrastructure projects, now is the time to develop shovel-ready projects. When the 2008/2009 financial crisis hit, the government created major new funding for infrastructure and energy efficiency projects. If history is a guide, organizations with projects already in the pipeline will be first in line for that funding.
“A lot of organizations are in a ‘wait-and-see’ mode right now,” said Tammy Fulop, Schneider Electric’s Vice President. “But we know from past experience that now is the time to put plans in place so public entities are ready to go when funding becomes available. With stimulus funding packages in limbo, leaders need to think about alternate ways to create new funding paths and lower operating costs because future bond issues will likely be limited. We can help with both — and guarantee the outcome.”
Benefiting Real-World Clients with an Array of Options
To implement impactful plans, Schneider Electric partners with each client to determine how energy infrastructure can contribute to long-term objectives and which funding options are available, such as bonds or grants.
One such client, Stockton Unified School District in Stockton, CA, began their journey to becoming a high-performing, net-zero school district with Prop 39 legislation. With 53 schools and 40,000 students, they needed a plan that maximized their funding to make impactful changes across a sprawling district. See how Schneider Electric helped to optimize their $6.3 million project in the video below:
Since implementing their Prop 39 measures, Stockton USD has continued their modernization and sustainability initiatives. In 2019, they brought solar energy battery storage to two of their high schools—utilizing rebates to cover the cost—and boosted their solar array benefits to help offset peak energy costs. Stockton continues to lead the way in sustainability for all California districts, and are currently working on an electrified transit center with Schneider Electric.
Reaching Goals Through Innovative Technology and Financing Solutions
What it all adds up to is exactly what made Guidehouse name Schneider Electric the No. 1 ESCO again: the team goes beyond merely providing an ESPC to helping organizations reach their goals; goals that many thought were unattainable.
While many ESCOs can implement an ESPC, no other company offers the combination of innovative strategy and execution. That’s because Schneider Electric’s real stand-out quality is the multi-disciplinary approach it brings to projects — and to partnerships.
Learn more on how energy infrastructure can be used to achieve mission-critical modernization and long-term goals.