Energy Modernization Without Budget Expenditures: How the ESCO Model Works for Communities. Experience of Panorama Group of Companies

20.02.2026

On February 18, during the Energy Club online meeting “Technologies and Solutions for Community Energy Security,” participants discussed not only technical solutions but also financing tools. How can communities modernize critical infrastructure facilities if there are no free funds in the local budget? The answer is energy service (ESCO). Ihor Mavrin, Project Manager of Panorama Group of Companies, explained how this mechanism works in Ukraine and presented ready-made cooperation algorithms.

About Panorama Group of Companies

Panorama Group has been operating in the Ukrainian market for over 10 years. The company has significant experience in turnkey infrastructure construction: from street and stadium lighting to the installation of flagpoles in major cities (Poltava, Kharkiv, Khmelnytskyi). It is an official representative of global brands Philips and Schreder and has its own production of metal structures (Rosa TM poles, brackets, etc.). Today, one of the company’s key focus areas is alternative energy: design and construction of utility-scale solar power plants (SPP) with energy storage systems. Panorama Group is an active participant in the Ukrainian Association of Energy Service Companies.

What is Energy Service (ESCO)?

Energy service is a mechanism where an investor (an ESCO company) designs, builds, and commissions a facility (for example, an SPP, thermal modernization, or pump replacement) at its own expense. The customer does not spend budget funds but pays the investor exclusively from the achieved and guaranteed energy savings. This model is ideal for public infrastructure facilities: water utilities, district heating companies, hospitals, schools, kindergartens, and administrative buildings.

The ESCO Market in Ukraine: Figures and Legality

This is not a pilot experiment but a reliable tool that has been operating in Ukraine for over 10 years:

• The Energy Service Association has more than 40 active members.
• Over UAH 1 billion has already been invested, with contracts signed for over UAH 3 billion.
• The mechanism is fully legalized: Cabinet of Ministers decrees (No. 845, No. 1178) are in effect, there are approved ESCO contract templates and a clear regulatory framework.

How It Works in Practice (Using SPP Construction as an Example):

• Facility Audit: Electricity consumption of the municipal institution and available area (roof or land plot) are analyzed. The intersection of this data determines the optimal SPP capacity.
• Tender Preparation: The baseline consumption level is determined. With the support of UNDP in Ukraine, a package of documentation is prepared for bidding on the Prozorro platform.
• Implementation and Payment: The winning ESCO company installs the equipment at its own expense. After launch, meters record the percentage of savings. From these savings, the customer pays the investor.
• Transfer of Ownership: After the contract term expires (or the payment amount is reached), the equipment is transferred to the community’s balance sheet free of charge, which then receives 100% of the savings from generation.

Legislation allows concluding ESCO contracts for up to 15 years. In practice, this is usually 8-11 years. However, since electricity tariffs for non-residential consumers are constantly rising, the amount of savings increases, and contracts are often closed early.

Cooperation Scenarios for Communities

Panorama Group offers customers several interaction packages:

• Package 1. Express Audit: Data collection and selection of 3-5 potential community facilities. Conducting a feasibility study to understand if the facility will be of interest to an ESCO investor.
• Package 2. In-depth Audit and Tender Documentation Preparation: Detailed study of the baseline consumption level and full preparation of tender documentation for Prozorro.
• Package 3. Turnkey ESCO: Full support of the customer at all stages (from idea to contract conclusion), which is especially relevant for communities that do not have experienced energy managers.

Geography of Work and War Risks

The ESCO model is successfully implemented in almost all regions of Ukraine. Panorama Group operates throughout the territory: from Zakarpattia and Chernivtsi to the Kharkiv region. When working in areas close to the frontline, investors take into account the risks of damage to facilities — all these force majeure circumstances are discussed in advance and clearly regulated by the terms of the energy service contract.