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A Checklist for Evaluating an EPC Proposal

A Checklist for Evaluating an EPC Proposal


Reading Time: ~12 minutes
Key Takeaway: A strong EPC proposal must be clear, transparent, backed by real data, and easy for non-engineers to understand. This checklist helps you evaluate every part confidently.

Introduction (PAS Framework | ~120 words)

Problem: Many building owners struggle to understand EPC (Energy Performance Contracting) proposals. They look impressive, full of technical terms and savings charts—but it’s hard to tell which proposals are reliable and which are risky.

Agitation: Choosing the wrong proposal can lock you into long-term commitments, unexpected costs, poor performance, or unrealistic savings promises. Once the project begins, fixing mistakes becomes expensive, stressful, and time-consuming. The proposal stage is your best chance to protect yourself.

Solution: That’s why you need “A Checklist for Evaluating an EPC Proposal.” This checklist breaks complex engineering into simple, practical steps so you can compare proposals fairly, spot hidden risks, and choose the ESCO that truly delivers value—not just big promises.

Summary Box

  • Helps you compare EPC proposals confidently

  • Shows what every proposal MUST include

  • Helps detect unrealistic savings

  • Protects you from hidden risks and future disputes

  • Makes evaluation simple—even without technical knowledge

SECTION: Understanding A Checklist for Evaluating an EPC Proposal (Eighth-Grade Reading Level | ~2400 Words)

Choosing the right EPC proposal can feel overwhelming. Every company promises big savings, advanced technology, and “the best solution.” But not all proposals are created equal. Some are solid and reliable. Others leave out important details or hide risks behind complicated wording.

To help you make a confident choice, A Checklist for Evaluating an EPC Proposal gives you a clear and simple way to review each section of an EPC submission. By using this checklist, you can understand what matters, what to look for, and what questions to ask—without needing to be an engineer.

Let’s go through each part of the checklist step by step.

1. Confirm Basic Information and Scope

Every proposal must start with clear, basic details. If these details are missing or unclear, it is a red flag.

Your checklist should include:

  • Company name, address, and background

  • Project location

  • Project scope

  • Duration of the contract

  • Contact persons

Look for:

  • A clear explanation of what exactly the ESCO will do

  • Whether the proposal covers your full building or only selected areas

  • Whether the ESCO shows past experience in similar buildings

Why this matters:
If the scope is unclear, the ESCO can later claim certain tasks were “not included.”

2. Check the Baseline Calculation Method

The baseline is the “before” condition your savings will be compared to. This is one of the most important parts of any EPC proposal.

A Checklist for Evaluating an EPC Proposal must include:

  • How the baseline was measured

  • What data sources were used

  • How many months of data were analysed

  • Whether weather or occupancy adjustments were considered

Ask yourself:

  • Does the baseline reflect real building usage?

  • Was enough historical data used?

  • Is the ESCO transparent about assumptions?

Why this matters:
A wrong baseline means wrong savings. This can lead to disputes later.

3. Evaluate the Savings Guarantee

The savings guarantee is the heart of every EPC project. It should be clear, measurable, and realistic.

Your checklist should verify:

  • The exact savings percentage

  • Whether the savings are gross or net

  • The time required to achieve the savings

  • What conditions must be met to achieve the savings

  • Whether the ESCO explains how savings will be measured

Look for:

  • A guarantee written in simple, plain language

  • A guarantee backed by real data, not marketing claims

Be careful of:

  • Guaranteed savings that seem too high (like 50%+ without major upgrades)

  • Savings that depend on unrealistic operating conditions

4. Review the Proposed Energy Conservation Measures (ECMs)

ECMs are the physical upgrades, equipment changes, or system improvements recommended by the ESCO.

A Checklist for Evaluating an EPC Proposal must include:

  • A list of all proposed ECMs

  • Expected savings from each ECM

  • Costs of each ECM

  • Technical specifications

  • Return on investment (ROI)

  • Payback period

Good ECM descriptions will include:

  • Purpose of the measure

  • How it will reduce energy use

  • Technology used

  • Installation timeline

  • Maintenance requirements

Examples of ECMs:

  • LED lighting retrofit

  • Chiller replacement

  • AHU optimisation

  • Solar installation

  • BMS upgrades

  • Air compressor optimisation

Why this matters:
You must be able to see exactly where the savings come from.

5. Check Measurement & Verification (M&V) Plan

M&V is used to confirm whether the ESCO actually achieved the promised savings.

Your checklist must verify:

  • Which M&V protocol will be used (e.g., IPMVP)

  • What data will be measured

  • How often measurements will be taken

  • What meters or tools will be used

  • How adjustments will be made for changes in weather or occupancy

Look for:

  • Clear, step-by-step reporting

  • Transparent methods

  • Independent data sources

Avoid:

  • M&V plans that are too vague

  • Plans that allow ESCOs to adjust data without clear rules

6. Evaluate the Financial Model

The financial model explains how much you will pay, when you will pay, and how savings are calculated.

Check for:

  • Capital cost

  • Operating expenses

  • Financing terms

  • Savings-sharing model

  • Payment schedule

  • Expected ROI

  • Penalties if savings are not achieved

Be cautious of:

  • Proposals that avoid showing detailed numbers

  • Hidden fees

  • Charging for equipment you did not request

  • Vague financing terms

Your checklist should ensure the financial model is easy to understand, even without an accounting background.

7. Review ESCO Responsibilities

An EPC contract can last up to 10 to 15 years. You must know exactly what the ESCO is responsible for during that period.

Look for:

  • Installation responsibilities

  • Maintenance duties

  • Reporting obligations

  • Equipment warranty

  • System training for your staff

  • Response time for repairs

If any of these responsibilities are missing or unclear, add them to your checklist.

8. Review Owner Responsibilities

Just like the ESCO, the building owner also has responsibilities.

Your checklist should confirm that the proposal clearly explains:

  • What the owner must maintain

  • Any operational adjustments needed

  • What data the owner must provide

  • Access rights for ESCO teams

  • What equipment cannot be altered by the owner

Why this matters:
Savings may drop if the building runs differently than expected. Clear owner responsibilities prevent disputes.

9. Evaluate Technology and Product Specifications

Not all equipment is equal. Some proposals use outdated or low-quality technologies to cut costs.

Your checklist should include:

  • Brand names

  • Efficiency ratings

  • Product models

  • Expected lifespan

  • Warranty period

Look for:

  • Trusted brands

  • Transparent specs

  • Clear efficiency improvements

Avoid:

  • “Generic” labels with no brand

  • No explanation of performance standards

  • Overly complicated systems that your team cannot maintain

10. Check for Risk Allocation

Risk allocation explains who is responsible if something goes wrong.

Your checklist should verify:

  • Who pays if savings are not achieved

  • Who pays for equipment failures

  • Who handles unexpected building changes

  • Who is liable for delays

  • Who covers additional costs

Good proposals clearly define risks. Weak proposals leave many risks to the owner.

11. Evaluate the Project Timeline

Your checklist should ensure the proposal includes:

  • Start date

  • Implementation period

  • Testing and commissioning timeline

  • M&V reporting schedule

  • Full project duration

Make sure timelines are realistic and not rushed.

12. Check for Commissioning & Testing Procedures

Commissioning ensures that equipment works properly after installation.

Your checklist should include:

  • Testing procedures

  • System verification

  • Equipment calibration

  • Final performance testing

  • Facility team training

A proposal without proper commissioning steps is risky.

13. Review Maintenance Plans

Maintenance is crucial for long-term savings.

Your checklist must confirm:

  • Who maintains the equipment

  • How often maintenance is done

  • Maintenance cost

  • Spare parts availability

  • Emergency support response time

If maintenance is not clearly defined, savings may decline over time.

14. Evaluate Transparency and Communication

Good ESCOs explain things simply. Poor ESCOs hide details behind technical jargon.

Look for:

  • Clear explanations

  • Logical structure

  • Easy-to-read diagrams

  • Straightforward savings calculations

If the proposal feels like it’s hiding something, it probably is.

15. Review ESCO Reputation and Track Record

Your checklist should include:

  • Past EPC projects

  • Number of years in the industry

  • Case studies

  • Testimonials

  • Certifications

  • Awards

A strong track record shows reliability.

16. Check for Independent Technical Review (Optional but Powerful)

One of the most important steps is getting an independent technical advisor (ITA) to verify the proposal.

An ITA can help:

  • Confirm savings accuracy

  • Validate baseline

  • Review engineering calculations

  • Identify hidden risks

  • Ensure fairness

This step increases your confidence and protects your investment.

17. Compare Proposals Using a Standard Matrix

Once you complete A Checklist for Evaluating an EPC Proposal, compare all proposals using a simple matrix.

Compare:

  • Savings percentage

  • Costs

  • ECM list

  • Technical specifications

  • Warranty terms

  • M&V approach

  • Risks

  • Timeline

This helps you avoid being influenced by flashy marketing.

18. Identify Red Flags

Watch out for:

  • Savings above 40% without major upgrades

  • Missing M&V plans

  • No baseline explanation

  • Vague financial model

  • Unrealistic claims

  • Generic product specs

  • Missing maintenance details

These are warning signs of weak proposals.

19. Identify Strong Green Flags

Strong proposals usually:

  • Explain everything clearly

  • Share real case studies

  • Use trusted brands

  • Provide detailed M&V plans

  • Offer realistic savings

  • Show transparency in costs

  • Provide long-term support

These are signs of a credible ESCO.

Conclusion & Call to Action

By using “A Checklist for Evaluating an EPC Proposal”, you can evaluate proposals confidently, understand every part clearly, and protect yourself from costly mistakes. The checklist helps you compare ESCOs fairly, spot hidden risks, and choose the partner who will deliver real performance—not just promises. If you want help reviewing an EPC proposal or need expert guidance to avoid risks, WhatsApp or call 013-300 6284 today.

 

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