Energy Service Agreement for Rental Property Owners: How to Save Money and Conserve Energy
One of the biggest expenses for rental property owners is energy use. Whether you own a single rental property or a portfolio of properties, energy bills can add up quickly and put a strain on your finances. However, with an Energy Service Agreement (ESA), you can save money on energy costs and reduce your environmental footprint.
What is an Energy Service Agreement?
An Energy Service Agreement is a contract between a property owner and an energy service company (ESCO). The ESCO provides energy-efficient upgrades to the property, such as LED lighting, low-flow water fixtures, and HVAC upgrades. The ESCO finances the upgrades and recoups their investment through the energy savings generated by the upgrades.
The property owner agrees to pay the ESCO a portion of the energy savings for a set period of time, typically five to ten years. After the agreement term expires, the property owner retains all the energy savings.
Benefits of an Energy Service Agreement
An ESA offers several benefits to rental property owners, including:
1. Cost Savings: By upgrading your property with energy-efficient measures, you`ll save money on your energy bills. The savings can be significant, with some property owners seeing up to a 50% reduction in energy costs.
2. Increased Property Value: Energy-efficient upgrades can increase the value of your property. These upgrades are desirable to tenants, who are looking for properties that are cost-effective and environmentally friendly.
3. Reduced Environmental Footprint: By reducing your energy use, you`ll reduce your environmental impact. Energy-efficient measures help to conserve natural resources and reduce greenhouse gas emissions.
How to Get an Energy Service Agreement
To get an Energy Service Agreement, follow these steps:
1. Find an ESCO: Look for energy service companies in your area. You can find a list of ESCOs on the U.S. Department of Energy website.
2. Get an Energy Audit: An Energy Audit will identify the areas in your property where energy-efficient upgrades are needed. The ESCO will provide a free energy audit and a proposal for the upgrades.
3. Sign the Agreement: If you`re satisfied with the proposal, sign the Energy Service Agreement. The ESCO will finance the upgrades and recoup their investment through the energy savings generated by the upgrades.
4. Enjoy the Savings: Once the agreement term expires, you`ll enjoy the savings generated by the energy-efficient upgrades.
Conclusion
An Energy Service Agreement is an excellent way for rental property owners to save money on energy costs and reduce their environmental footprint. By upgrading your property with energy-efficient measures, you`ll see cost savings, increased property value, and reduced environmental impact. Follow the steps above to get an Energy Service Agreement and start enjoying the benefits today.