EPC (Energy Performance Contract)

An Energy Performance Contract (EPC) is a contract that commits a service provider (operator, building manager, ESCO) to achieving measurable energy savings within a defined scope (building, group of buildings, network). It is not an obligation of means, but an obligation of performance: remuneration is partially indexed to the savings achieved compared to a baseline. The EPC thus structures an OPEX/CAPEX trajectory: first, optimized adjustments and operation, then targeted investments (insulation, BMS, heat pumps, solar panels, etc.).

CPE: Operational and mechanical definition of the contract

An Energy Performance Contract (EPC) begins with a baseline that describes the reference consumption (kWh, €) over a past, normalized period (weather, occupancy, time of day). The service provider then proposes a plan of measures:

- No/low-cost (BMS settings, sequencing, balancing, instructions),

- Investments (insulation, lighting, HVAC, renewable energy, monitoring),

- Control (remote monitoring, alarms, dashboards).

Measurement & Verification (M&V) often relies on the IPMVP (Options A/B/C/D) to demonstrate savings. The contract specifies: scope, quantified objectives, timeline, penalties/bonuses, profit sharing, duration (typically 3–8 years), and adjustment clauses (weather, surface area, usage). In co-owned/commercial buildings, the investment can be delegated through third-party financing, with the annual payment covered by a portion of the guaranteed savings.

Advantages, limitations and points of attention of a CPE

Interests

• Guaranteed results: quantified savings, penalties for non-achievement.
• Budgetary visibility: OPEX stabilized, CAPEX phased and prioritized.
• Continuous monitoring: M&V, remote metering, regular reviews with action plans.
• Decarbonization accelerator: obligation to reach energy/CO₂ targets.
• Alignment of interests: the service provider wins… if the building consumes less.

Boundaries

• More complex contractual arrangements (legal, technical, data).
• A robust baseline and reliable data are needed (otherwise there will be disputes).
• Possible rigidity if usage changes significantly (density, hours, surfaces).
• M&V and supervision costs to be included in the model.

Points to consider

• Data quality: undercounting, weather, occupancy, historical cleaning.
• IPMVP: choose the option that is appropriate for the scope and means of measurement.
• Adjustment clauses: clear rules in case of changes in usage.
• Risk allocation: CAPEX, performance, energy prices, availability.
• Governance: monitoring committees, audit schedule, transparency of calculations.
• Work plan: sequence quick wins vs investments, constraints of an occupied site.

Anecdote — “A CPE that brought Lyon into agreement”

In Lyon, a multi-tenant office complex had unstable bills and recurring complaints. The Energy Performance Contract (EPC) established a streamlined baseline (weather/occupancy), IPMVP rules, and then a set of actions: softened water treatment, sequencing of reminders, variable-speed pumps, and LED lighting with motion detection. After 18 months, the guaranteed savings were exceeded by 6%; part of the bonuses financed additional attic insulation. The tenants' main takeaway was: "For once, we know who's doing what, when, and with what results." The moral of the story: a good EPC is as much about governance as it is about the energy contract itself.