The Noesis Shared Savings Agreement (SSA), an industry first, is ideal for efficiency projects ranging from $500k to $2-3m. It is optimized for mid-size to large project developers that want to offer off-balance-sheet performance contracting to their customers.
Last year, Noesis launched Noesis Financial Services to help its customers overcome capital budget constraints by providing them with an outsourced financing desk that helps them evaluate and secure third-party financing for small to mid-sized efficiency retrofits.
Initially providing basic brokerage services, Noesis Financial Services has signed up more than 30 energy efficiency product and service providers, and quoted over $37m in energy projects.
"Aligning the financing with the actual energy savings realized has been a model that has been hugely successful in residential solar. With Noesis Shared Savings Agreement, we’re applying that same model to the commercial and industrial energy efficiency market, only at a much larger scale," said Scott Harmon, CEO of Noesis Energy.
The SSA is similar to a solar power purchase agreement, in that it allows the customer to pay only for the energy they actually save from the project. Similar in concept to the PPA ‘net meter’ payment, the SSA customer pays a variable payment based upon the amount of avoided energy measured, a concept sometimes referred to as ‘negawatt pricing.’
However, SSAs are much simpler and more flexible than traditional large-scale guaranteed performance contracts, making them more attractive to mainstream commercial and industrial CFOs. In addition, the SSA is designed for mid-sized projects and the contractors and developers that sell them, so they allow mid-sized firms to position themselves as ‘virtual ESCOs’ and greatly extend their customer reach, all without over-burdening their balance sheets with risk.
