Energy Savings Performance Contracting and Measurement and Verification Flashcards
__ __ is treated like a loan for tax purposes
In there is a buy out option for any value at the end of the term must be __ __
Can deduct interest portion of finance payments
Claims “depreciation” (tax benefit)
Does own equipment at the end of term
capital lease
__ __ is a rental agreement
entire payment is tax deductible
lessee doesn’t own equipment at the end of the term
True lease
Upfront project costs are typically paid by customer with funds from the bank/financier (even with __ __)
performance contracts
How can financing add value to a project?
It’s effective if the discount rate MARR is high (above 25%) and finance rate is low (10% or less)
Energy Service Company typically
- identify, installs, savings-based projects at a customer’s facility and guarantees the savings
- Usually arranged with loans, bonds, and leases, such that the ‘savings guarantee’ is great than the financing payments
- commonly used at government facilities - less risk to the ESCO because the customer will likely not go out of business
Biggest benefit to ESCO
maintenance ideas, experience, processes, etc.
M & V
The process of quantifying savings delivered by an Energy Conservation Measure (ECM)
IPMVP
Option A - Retrofit isolation-key Parameter measurement or just one thing - hard to justify these projects
What are factors that can affect the finance rate charged by a bank?
credit, project complexity, contract terms
What are the typical contract structures used for PCs?
Shared savings and guaranteed savings
Projects that measure and verify with a calibrated simulation - use when baseline data is not available
Option D
whole facility measurement - projects where savings are projected to be >10-20% of the baseline
Option C
retrofit isolation - all parameters measurement - measure of change of more than one thing
Option B -
