When considering rooftop solar, a business needs to assess electricity costs, investment capital and operating responsibilities together. Working with an energy service provider can offer different ways to allocate funding and work. The value of each arrangement depends on facility data and contract terms.
What is an ESCO’s role in an energy project?
ESCO stands for Energy Service Company. Its services can include assessment, design, implementation, arranging finance and monitoring performance, as agreed. In a performance-based agreement, the parties need to establish how results will be measured and verified, and who is responsible if performance differs from the agreed level.
For a solar project funded by a third party, the business should identify who owns the system, who buys the electricity, who operates it and how payments work. These roles are defined in the agreement for the project.
What should a business clarify before choosing an arrangement?
Funding, ownership and payment obligations
Identify the investor, the costs the customer must cover, roof access rights and asset ownership at each stage. Third-party funding should be assessed alongside the customer’s remaining obligations, including payments, site access and arrangements at contract expiry.
Pricing and the basis for assessing costs
Clarify electricity charges or service fees, adjustment mechanisms, duration and payment terms. Compare options using consistent assumptions for load, expected generation, self-consumption and costs over the evaluation period. Any savings figure needs to be calculated from project data and the proposed terms.
Design, operations and incident response
Review the roof, existing electrical system, connection conditions and effects on production. The agreement should identify who maintains, insures and monitors the system, handles incidents and reports results. Performance targets or guarantees need a measurement method, applicable conditions and corresponding responsibilities.
Asset transfer and energy attributes
Clarify renewal, termination, purchase and transfer terms. If the business intends to report renewable electricity use or emissions, establish ownership of energy attributes and the evidence it is entitled to use.
Start with facility information
Prepare electricity consumption data, operating schedules, roof and electrical system information, and investment and operating objectives. These inputs support a comparison of direct investment and third-party arrangements on a consistent basis.
365Energy can help define the input data and scope of technical and commercial assessment appropriate to the project.
Discuss investment options for your facility or review the points to clarify in a PPA arrangement.
References
These international references explain concepts and the allocation of responsibilities. Implementation in Vietnam requires a review of the project, agreement and applicable requirements.