In systems contracting, the complete responsibility for providing energy in contracted quality and quantity is outsourced. The energy service provider signs a contract extending over multiple years and governing the delivery of room or process heat, refrigeration, compressed air, electric power, steam, etc. The energy service provider establishes and operates the energy system at his expense and assumes the complete technical and economic risk related to performance.

Normally the system remains the property of the energy service provider for the life of the contract and transfers to the ownership of the customer at the end of the contract (depending on contract formulation). With the end of the contract period, an extended contract or a management contract can be arranged with the energy service provider. The client pays a contracted price for the energy used. This price comprises the basic price, the unit price and the meter charge. This covers the costs of service (e.g., maintenance and repair, 24-hour service, remote monitoring), the refinancing of the entire energy system and the purchase of fuel.

In systems contracting the services are of particular importance because the energy service provider also has an enormous interest in operating the system as economically and energy efficiently as possible in order to assure the security of the energy supply. Systems contracts often include guarantee provisions covering such aspects as failure of the system, earnings from systems for production of renewable energy, etc.

Source: Austrian Chamber of Commerce