If you are new to the world of energy efficiency, you likely have a lot of questions. What is an ESCO? What does ESCO stand for? How can it help you with your energy needs? As you strive to become more energy efficient and meet your specific energy needs, it is important that you familiarize yourself with the world of energy solutions so that you can make an informed decision about the best energy choices for you, your family, or your business.

What Does ESCO Stand For?

ESCO stands for Energy Service Company.

What is an ESCO?

Whether commercial, residential, or non-profit, an ESCO provides a wide variety of energy solutions. ESCOs may also help with designing and implementing projects that conserve energy, retrofitting, generating power, supplying energy, outsourcing energy infrastructure, and managing energy risks.

Individuals and companies can use the resources of an ESCO to better their homes or businesses and to leave a smaller footprint by using alternative energy sources. Some eco-friendly ESCOs have zero gas plans and offer a wide variety of clean energy options. Solar power is not the only clean energy source, and an eco-minded ESCO can help you find a clean energy source that fits your needs and budget. Other ESCOs use Renewable Energy Certificates (RECs”) to help offset a customer’s electric usage.

In asking “What is an ESCO?” or “What does ESCO stand for?” people often wonder if ESCOs are involved with energy financing. Only some ESCOs deal with financing—most deal with the distribution of energy sourcing. Financing with ESCOs is generally only done for large-scale projects.

We should also make sure that we are clear about a very important concept; what it means that ESCOs function as energy “suppliers.”

An energy supplier is a company that acquires energy, be it electricity, renewable energy or natural gas supplies from a wholesale market and then sells it to homes and businesses. We should state that an ESCO or energy supplier is not your local utility, your local utility company will still handle distribution and transmission methods that actually deliver the energy to its intended destination, such as your home.

An energy supplier or ESCO simply buys the wholesale energy and couples with other services and programs to offer a superior product to you the consumer. This helps combat the near monopolistic method of operation that utility companies typically get to take advantage of.

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What Does an ESCO Do?

After the deregulation of a specific energy field or market, an ESCO has the option to purchase energy — both alternative and electric — and sell it to its customers. Generally, an ESCO is the middleman between the company actually creating the energy and the company that delivers the energy to the average consumer. Sometimes, an ESCO becomes the supplier.

ESCOs specialize in providing lots of energy options and using the free market system.

Other Functions of an ESCO:

Some ESCOs work with long-term energy projects. These are the types of ESCOs that work with financing to some degree. ESCOs take on all aspects of big projects, from design to budgeting and management. Often, ESCOs help companies that need to power a large facility to analyze and prepare for the project, find the most cost-efficient route, and monitor the process. In these types of situations, ESCOs take on much of the risk of the project.

Many ESCOs are also vitally important for those who want to leave a smaller carbon footprint and live off a more renewable and sustainable source of energy. By bringing new energy resources to the market and making them more widely accessible, ESCOs can help innovate the clean and renewable energy sector by bringing it to consumers. In an effort to reduce carbon offset and make the energy sector more eco-conscious, ESCOs like Kiwi Energy help educate the public on the benefits of clean energy. We strive to bring energy choices to the people who are dedicated to making a difference. Learn more about Kiwi Energy.

Now that you know all about ESCOs, if you ever hear a friend ask “What is an ESCO?” or “What does ESCO stand for?” you have the answer. Together, we can participate in the innovation of energy by capitalizing on what ESCOs have to offer and going a little greener when it comes to your energy consumption.

*This blog post is generally discussing ESCOS and does not represent certain products offered by Kiwi Energy. For more information about our products, visit kiwienergy.us.