Contract decisions analysis of shared savings energy performance contracting based on Stackelberg game theory

Abstract

Energy Performance Contracting is a contractual arrangement between energy users and Energy Service Companies (ESCOs) and is currently the main mechanism for implementing energy-saving retrofitting measures in existing buildings. The paper centers around the decision-making conundrum pertaining to the energy-saving sharing percentage and initial project investment within the realm of shared savings Energy Performance Contracting. By formulating a Stackelberg game-based decision-making game model, we examine the optimal contract decisions of both the energy user and the ESCO. The results of numerical experiments demonstrate that this method yields significant advantages for both energy users and ESCOs. Additionally, we observed that the employment of more sophisticated energy-saving technologies by the ESCO and a higher share of investment by the energy users result in superior energy-saving efficiency.