An ESCO (or EPC - Energy Performance Contract) is a financial scheme where the CAPEX of an energy efficiency investment is covered by a third party, a financial partner that shares energy savings (usually between 50-80%) with the company at whose site the investment was made for the next 5-8 years. The ESCO company thus buys the product and installs it at the specific location. At the end of the term, the product may remain the property of the ESCO or be transferred to the partner (depending on the construction).
During the ESCO period, the operation of the refurbished system must not change significantly because the return of the investor can be danger (example: if a cheese factory produces 100 tonnes of cheese per month, after the cooling system is refurbished in an ESCO model, if the quantity of cheese is reduced to 50 tonnes, then the investor’s savings potential is also reduced by about half). In such cases, different compensations are made for the ESCO financiers.
The ESCO company usually takes over the operation of the system, because it has to ensure the operation of the system to ensure the savings.
ESCO companies love high-value hardware products because the high-value asset provides them financial security.