Energy service companies — commonly known as ESCOs — offer a compelling strategy for facilities looking to reduce energy costs without up-front capital. Talking to Dave Lubach, executive editor for the facility market during a Show Central conversation at the recent NFMT conference, Tim Unruh, executive director of the National Association of Energy Service Companies (NAESCO), broke down how these partnerships work and why they’re gaining traction in public and institutional facilities.
Unlike traditional contractors, ESCOs aren’t brought in to complete a predefined project. Instead, they audit a facility to identify potential improvements that reduce operational costs — then use those savings to finance the work itself. This performance-based approach is often formalized through an “investment-grade audit” that includes a firm price and guaranteed energy savings.
From lighting retrofits to comprehensive upgrades of HVAC systems, controls, water infrastructure, and even renewables, ESCOs are evolving with building technologies. But the real value, Unruh says, is in the long-term relationship.
“It’s not install and walk away,” he said. “These are 10- to 20-year partnerships.”
Facility managers are advised to start by contacting an accredited ESCO. Every contract can be customized, from light consulting to full-scale implementation, and public agencies often benefit from procurement laws designed specifically for these agreements.
Listen to the full session to learn more about partnering with an ESCO.
Dave Lubach is the executive editor for the facilities market. He has 10 years of experience writing about the facility management industry.
