Shared Savings Agreement
The Shared Savings Agreement (SSA) is a performance-based financing vehicle for funding energy efficiency and distributed generation projects in commercial buildings. The SSA addresses one of the biggest obstacles to investing in energy-saving technologies – building owners simply don’t trust the forecasted savings. Using an SSA, the building owner only pays as the savings are achieved.
The SSA is designed for larger building improvement projects – typically between $500k and $3mm in size – where building owners prefer to have some assurances that the savings and incremental cash flows will be achieved. The SSA provides this by sharing the performance risk (that is, the risk that the project does not deliver the savings) between Noesis and the project developer. With no performance risk, the building owner simply pays as the savings are achieved. No savings. No payments. No risk.
SSA Project Qualifications
The minimum project size for a Noesis SSA is $500k in total project cost (amount financed). Projects within a building and across buildings may be combined in a single SSA and to meet the $500k minimum. Any projects combined must be in buildings with the same building owner.
The typical SSA term ranges between four and seven years. At the end of the SSA term, equipment can be purchased at fair market value, refinanced or returned to Noesis. For accounting purposes, the SSA is generally treated as an off-balance sheet financing.
Eligible products include lighting, HVAC, building automation and controls, building envelope improvements, distributed generation / co-generation, and water conservation. Others considered upon request.