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22 October 2015

Energy Performance Contracting helps cities to replace inefficient street lights

An innovative method of financing the upgrade of street lights is being promoted to local governments by a new EU-funded project. Street lighting can account for up to 50 percent of a municipality’s total electricity consumption - by applying modern technology, such as light emitting diodes (LEDs), a reduction in electricity use of between 30 and 70 percent can be achieved.

The Streetlight-EPC project helps local authorities to avail of Energy Performance Contracting (EPC), a process whereby replacement and refurbishment costs are covered by an external energy service company (ESCO), who is then reimbursed through the cost savings generated as a result of the lower electricity consumption. As such, the ESCO will not receive payment unless significant energy savings are achieved.

The EPC approach has the benefit of transferring the risk from the local authority to the ESCO. The project is carrying out EPC projects in nine European regions, including the establishment of helpdesks that provide support to municipalities and SMEs. The project is particularly timely, as under an EU Regulation 80 percent of currently used street lamps are to be phased out by 2017.

For more information, visit the Streetlight-EPC website.