Energy service companies (ESCOs) often operate in an open book fashion as compared to a more traditional process that has many of the costs hidden in the contractors bid. Both construction processes have similar costs, whether or not they are broken out in as much detail depends on the transparency of their cost and bidding structure.
Construction and implementation costs are based on the specific project scope and services provided for in the design and specifications and will typically include the categories shown in Figure 1 below.
Figure 1: Cost Structure Comparison between Energy Service Companies and Traditional Construction
Value of Approach Compared to Traditional Construction Processes
There are many benefits that energy service companies can provide because of the way they are able to structure the project team and engage strategies specific to providing value to clients. Many of these strategies reduce costs, improve solution decisions, and enhance the implementation of energy efficiency projects when comparing to traditional construction. Some of these differences are shown in Figure 2 below.
Figure 2: Comparison of Approach between Energy Service Companies and Traditional Construction
A traditional construction process is what many clients are used to but often this approach has inherent problems with collaboration and teamwork between project organizations. The flexibility of guaranteed energy cost savings contracts allows energy service companies to develop and approach solutions and implementation plans that will best meet client needs.