Energy Performance Contracting (EPC) as a Sustainable Financing Tool
Energy Performance Contracting (EPC) is a globally recognized financing mechanism that enables institutions to implement energy efficiency and renewable energy projects without upfront capital investment. Under this model, an Energy Service Company (ESCO) assumes the responsibility of designing, implementing, and maintaining the project, with the initial investment repaid through guaranteed future energy savings. This performance-based structure shifts technical and financial risks away from the public sector, allowing institutions to benefit from modernized infrastructure and cost reductions without burdening their budgets.
Internationally, EPC has proven successful in countries such as the United States, Germany, France, and China, where standardized contract frameworks, policy support, and robust measurement and verification protocols have accelerated adoption. The European Union’s Energy Efficiency Directive has also mandated member states to integrate EPC into national strategies for achieving energy and climate goals.
In Türkiye, EPC is governed by Law No. 5627 on Energy Efficiency and regulated through the Presidential Circular No. 2023/15, which mandates public buildings over 10,000 m² to achieve a minimum of 30% energy savings by 2029. The Ministry of Energy and Natural Resources provides detailed technical guidelines, certified M&V expert lists, and legal templates for public institutions to operationalize EPC in compliance with national policy.
Alanya Alaaddin Keykubat University (ALKU) is the first and only public university in Türkiye to implement an EPC-based solar power plant, setting a national precedent. In 2024, the ALKU Kestel Campus Solar Power Plant was awarded third place in the Public Category of the National Energy Efficiency Project Awards, selected from among 613 applicants. Following this recognition, ALKU expanded the initiative into an integrated sustainability model that now includes EV charging stations, organic waste valorization systems, ISO 50001-certified energy management, and I-REC certification for renewable energy traceability.
Importantly, ALKU has not only demonstrated the technical and financial viability of EPC within a university context but has also shared this knowledge through public events and national conferences. In one such event organized under the title “Success Stories in Building Energy Transformation,” more than 1,000 professionals from public institutions and the private sector were introduced to EPC mechanisms and ALKU’s best practices.
This experience showcases the EPC model as an adaptable and scalable financing solution for public universities and institutions seeking to meet sustainability targets in a cost-neutral manner. ALKU’s approach aligns legislative compliance, financial responsibility, and climate action into a replicable model that can be disseminated nationally and internationally.
