What Is An Energy Management Contract? Do You Know How To Save Money For Companies?

Regarding energy management contracts..., it is the kind of business that helps companies save energy and then make money together! Many people don’t quite understand this, but in fact, it’s just a simple matter - a professional company comes to you and do a thorough inspection of the equipment and systems of your factory to see where you need electricity, water and air, and then they pay to help you transform it themselves. The energy money saved after the modification will be divided into a certain proportion. After a few years, those newly installed equipment may be defeated, or discuss it again! For companies, it is quite attractive not to pay a large amount of renovation fees first, but most people still have some understanding of the specific operation and what are the tricks in it!

Determination-This is a big head! In other words, you have to figure out how much energy you spend now, so as to calculate how much you saved after the modification, right? There are many names here, such as the data for which period of time to choose, and whether there are any special circumstances that affect energy consumption during this period - just like it was very hot last summer, the air conditioner was turned on for a long time, so it was cooler this year and the energy consumption was low, so it could not be considered a credit for the transformation! So, how to get this, whether it is reasonable or not, and whether it can be recognized by both parties is directly related to how much money is saved and how to divide the accounts. It is very important.

Energy-saving measures design : It depends on whether the energy service company is professional or not, is it as simple as changing a batch of high-efficiency LED bulbs? Or should I replace the entire heating system? What is it that rows of solar panels are installed on the roof of the factory? Or add a frequency conversion control thing to your production line motor? Different solutions, how much money can be invested, how much energy can be saved, and how long it takes to see the money back, is not a little different, the difference is huge! It is necessary to "tailor" based on the actual situation of the company, what industry, how big the factory is, what energy is mainly used, and whether there are any special requirements. You can just take a plan and make it a trap. 80% of it is not possible!

Contract term and risk sharing : This contract is usually signed for a long time, three to five years is considered short, and there are also seven to eight years or more. After a long time, who knows what changes will happen in the middle? For example, if the price suddenly rises, the amount of money saved will be more; if the price drops, will the energy-saving income be reduced? Also, what should I do if the modified equipment often fails and affects production? Are these risks all subject to energy services companies? Or do both sides take it in proportion? The contract must be written clearly so as not to be upset later, which will be extremely troublesome!

Energy-saving and benefit-sharing contracts are the most common type of contracts for everyone - energy-saving service companies give the money for transformation and after the transformation is completed. After Party A (that is the enterprise) sees the real energy-saving effect, it will distribute it to Party B in a pre-determined proportion based on the saved money. This has been the case for the contract term of several years. When the contract expires, the renovated equipment will be directly assigned to Party A; there is another type of energy-saving and efficiency guarantee type (---Some people like to call it that), and the company can first pay a portion of the renovation money, or entrust an energy-saving service company to help raise funds, and after the renovation is completed. Party B ensures that it can achieve the lowest energy-saving value or energy-saving benefits. If it cannot be achieved, Party B has to find a way to make up for the difference. This feeling may take up some funds in the early stage, but if Party B pats her chest to ensure the effect, she seems to be more at ease? There is another type called energy cost custody, which means that the company will hand over all its energy system from buying energy to operating management, and then to subsequent maintenance to energy-saving service companies. Party B ensures that the total energy costs can be controlled within an agreed scope. This may be a bit worry-free for companies that don’t want to worry about energy? But which one to choose, you really have to think about your situation and then think about it.

Q: So can this thing really save money for the company? It won't be a lie

Answer: Generally speaking, as long as you are looking for a reliable and capable big, it is not a small guerrilla or fraud company. If you do it well, you will certainly be able to see the money coming back! The key issue is whether the energy-saving measures are implemented, and whether the project management is well managed. Find companies with many performance, successful cases that can be shown to you, and have good reputations, and the risks should be much smaller. After all, no one will be willing to spend money to be fooled

Q: Is the company obliged to provide its own detailed energy consumption data?

Answer: This is of course quite certain. I can't understand your original specific situation, how do I calculate and design the plan for you? Of course, these data are very sensitive things within the enterprise. You must write in the contract how to use the data, how to deal with it after use, and whether it will be leaked - pay attention to information security and privacy protection, which is absolutely true! Give it, but give it with confidence!

Personally, in our country's implementation for so many years, it should have its real market demand and actual value. Especially for many companies that want to reduce operating costs and want to respond to the national energy conservation and emission reduction calls, this is a good way to see low risks and results. But remember that not all companies are suitable for doing things, and not all ESCOs (a company name that can provide energy management services) can do things well! Before making a decision, companies must compare more companies and carefully read the terms of the contract. Don’t agree just because others say “can save money”.