In these times of tightening budgets and linger economic uncertainty, the energy savings performance contract model appears to be enjoying growing popularity.  In our most recent analysis of the ESCO market in the United States, one of the most interesting dynamics in the market is the federal sector’s growing appetite for third-party financing.  This is a new course for the U.S. government and for the Department of Defense in particular, which has not favored the ESPC model historically.  It now appears the Pentagon, which spends roughly $4 billion annually on energy, is reviewing a broad menu of tools and resources that will ensure compliance with energy-saving mandates.

Third-party financing, accessed through guaranteed savings contracts, presents a unique opportunity for the DoD to reach energy savings targets in its portfolio of buildings, despite declining Congressional appropriations.  In these budgetary conditions the approach calls for low-cost, scalable tools that will assess initial energy performance and identify opportunities for improvement, and provide on-going feedback, without requiring an onsite energy auditor.  Such a tool exists: FirstFuels’s Rapid Building Assessment, which my colleague Eric Bloom wrote about last September.  It appears FirstFuels’s RBA, like the ESPC model, is seeing growing adoption in the federal sector.

Rapid Building Assessment was one of 27 proposals selected by the Department of Defense’s Environmental Security Technology Certification Program (ESTCP) to demonstrate how energy technologies can save the military dollars and kilowatt-hours.  The “zero-touch” software aims to assess energy performance across the DoD’s more than 300,000 buildings using algorithms applied to consumption data to deliver actionable intelligence on building energy performance.  At roughly $2,000 per building, RBA can track down energy savings opportunities without human interference, cutting costs from the start.  And with the help of the widely used International Performance Measurement and Verification Protocol (IPMVP), RBA can provide feedback on actual savings.  Measurement and verification is a requirement for Federal sector energy savings projects.

The energy consumption profile of the Department of Defense is unique, given its particular operational requirements, which can mean big costs even just to assess energy savings opportunities.  Given the time and monetary constraints the DoD faces in implementing energy efficiency measures, the selection of FirstFuel’s RBA could be the solution to getting out from between that rock and hard place.