How Self-generation Projects Can Work for ESCOs

ABSTRACT

This article examines the current market for customer-sited electricity generation, or “self-generation,” activity in California and elsewhere as it relates to energy services companies (ESCOs). Solar photovoltaic (PV) and small combined heat and power (CHP) systems of less than 1 MW in commercial and institutional facilities are discussed. Incentive programs in several states that are contributing to brisk activity and the factors that seem most important to closing sales are also presented. While some CHP technologies can be sold on the basis of simple payback period, fuel cells and PV projects typically require more creative approaches. Several of the techniques that are used to justify PV projects are explained. The old sales adage that you “sell the sizzle, not the steak,” meaning that you must sell the benefits rather than the attributes of a product, holds true for self-generation (SG) projects, but it is important to know which attributes are worth selling.