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Calculate ROIESCO Model: Performance-Based Solar
An ESCO is a third party that funds and owns energy upgrades and is repaid from the savings, on terms set by its own contract. Trexon does not finance or underwrite ESCO contracts. Trexon's own routes are outright ownership (GITA-eligible) or hire purchase, priced per project from your bills.
What Is an ESCO?
An Energy Service Company (ESCO) is a company that provides energy efficiency and renewable energy solutions under a performance-based contract. Typically the ESCO funds, installs and maintains the upgrades, and is repaid from the energy cost savings under the terms of its contract.
How much performance risk the ESCO carries depends on its contract: some commit to a minimum saving, others simply share measured savings. Trexon does not finance ESCO contracts or underwrite their savings. Because the ESCO owns the equipment, the building owner cannot claim GITA on it.
Critically, ESCO is also broader than solar alone. An ESCO project can address the full energy consumption profile of a building — solar generation, LED lighting, HVAC optimisation, building energy management and power factor correction — rather than generation alone.
Performance Terms
Any minimum-savings commitment, and the remedy if savings fall short, is set by the ESCO's contract — not by Trexon.
ESCO-Funded Project
The ESCO funds and owns the equipment under its own terms. Trexon does not provide ESCO funding.
Beyond Solar
Unlike PPA (solar-only), ESCO includes LED lighting, HVAC, BEMS, and power factor correction as well as generation.
End-of-Term Terms
What happens to the equipment and the savings when the term ends is set by the ESCO contract. Read those clauses before signing.
How the ESCO Model Works
How a typical third-party ESCO contract runs. Trexon does not act as the ESCO or finance these contracts.
Energy Audit
An ESCO starts with an energy audit of the facility — mapping consumption, identifying inefficiencies and estimating savings potential across solar, lighting, HVAC and building systems.
Design & Finance
The ESCO designs an upgrade package and funds it under its own contract terms. Trexon does not provide ESCO financing; for an owned system, Trexon prices the solar portion per project from your bills.
Install & Operate
The ESCO installs and operates the equipment for the contract term. The scope of operation, maintenance and monitoring is whatever its contract specifies.
Share the Savings
Savings are measured against an agreed baseline and paid to the ESCO on the contract's terms. End-of-term ownership is also set by the contract.
What the ESCO Contract Decides
The baseline, how savings are measured and verified, and how they are shared are all contract terms.
Whether and how the equipment transfers to you is set in the end-of-term clauses.
Only a contract with an explicit minimum-savings clause requires the ESCO to cover a shortfall. Trexon does not underwrite ESCO savings.
ESCO vs Solar PPA vs Green Loan
Three structures compared. Trexon's own routes are outright ownership (GITA-eligible) or hire purchase; ESCO and PPA contracts are with third parties.
| Criteria | ESCO Model | Solar PPA | Green Loan |
|---|---|---|---|
| Upfront Cost | Set by the ESCO contract | Set by the third-party asset owner | Full capex (owned or financed) |
| Scope of Work | Solar + energy efficiency holistic | Solar generation only | Solar generation only |
| Savings Commitment | Only if written into the ESCO contract | Per-kWh rate per the PPA contract | None — performance is yours |
| Performance Risk | Per the ESCO contract terms | Shared (generation-dependent) | Fully on building owner |
| Equipment Ownership | ESCO during term; transfer per contract | Third-party asset owner | You, from day one (GITA-eligible) |
| Offered by Trexon? | No | No | Yes — outright ownership or hire purchase |
ESCO contracts can include efficiency measures beyond solar; any savings commitment depends on the ESCO's own contract.
Beyond Solar: What's Included in an ESCO Project
An ESCO project can address major sources of energy waste in a building — consumption as well as generation.
Rooftop Solar PV
Full solar installation sized to your roof area and consumption profile. Generation offsets purchased electricity directly, reducing TNB bills immediately.
LED Lighting Retrofit
Complete replacement of fluorescent and legacy lighting with high-efficiency LED across all zones — with the reduction measured against your existing fittings.
HVAC Optimisation
Chiller performance tuning, AHU balancing, variable speed drives, and cooling tower upgrades. HVAC is often the largest load in a commercial building.
Building Energy Management
Real-time BEMS monitoring and automated controls for HVAC, lighting, and equipment scheduling — enabling continuous optimisation beyond initial installation.
Power Factor Correction
Capacitor banks to correct poor power factor — can reduce reactive power penalties on your monthly bill.
Carbon Reporting
Full Scope 1 and Scope 2 emissions reporting from the BEMS platform — ready for ESG disclosures, Bursa sustainability reports, and CDP submissions.
Ideal Buildings for ESCO
ESCO contracts are most common in buildings with high energy consumption and potential for both solar generation and efficiency improvements.
Hotels & Resorts
High HVAC and lighting loads, 24/7 operations, and strong sustainability brand value make hotels common ESCO candidates. Savings depend on the building and are measured per project.
Hospitals & Healthcare
Critical facilities with continuous high loads and strict operational requirements. Third-party funding can suit organisations with constrained capital budgets.
Universities & Colleges
Large campuses with diverse building types, constrained capital budgets, and strong sustainability reporting requirements to students, donors, and accreditors.
Government Buildings
Public sector facilities where energy efficiency is a national policy priority. Government buyers procure through ePerolehan tenders.
Shopping Malls
High energy consumers with centralised ownership and management. Lighting and HVAC retrofits deliver rapid, measurable savings across large GFA footprints.
Office Towers
Large single-owner office buildings with high lighting and HVAC loads. Note that multi-tenant premises are not eligible for Solar ATAP.
Six Things to Weigh Before Choosing ESCO
What an ESCO contract changes, and when owning the system yourself makes more sense.
Third-Party Funding
Under an ESCO contract the ESCO funds and owns the equipment. Trexon does not provide this funding; Trexon's own routes are outright ownership or hire purchase.
Contracted Savings Terms
Any savings commitment comes from the ESCO's contract, not from Trexon. Check the baseline, measurement and shortfall clauses.
Own It Instead: GITA
If your company owns the system, it can claim GITA: 60% of qualifying capex set off against up to 70% of statutory income, with capex incurred, the system commissioned and the MGTC application submitted by 31 Dec 2026.
Full Lifecycle Management
For a system you own, Trexon designs, installs and commissions it, with O&M terms set out in your proposal.
Holistic Energy Efficiency
Beyond solar — LED lighting, HVAC optimisation, BEMS, and power factor correction address consumption as well as generation.
ESG & Carbon Reporting
Metered solar generation data supports Scope 2 reporting for Bursa sustainability reports, CDP and TCFD disclosures.
Key Facts
Frequently Asked Questions: Solar ESCO Malaysia
Common questions from facility managers, CFOs, and sustainability leads evaluating the ESCO model.
What is an ESCO and how does the model work in Malaysia?
An Energy Service Company (ESCO) is a third party that designs, funds, owns and operates energy-saving upgrades — solar, LED lighting, HVAC optimisation, building energy management — under an energy performance contract. The ESCO is repaid from the energy cost savings, on terms set by that ESCO's own contract. Trexon does not finance ESCO contracts or underwrite their savings; Trexon's own routes are outright ownership (GITA-eligible) or hire purchase through a partner.
How is the savings share split between the building owner and ESCO?
The split, the contract term and what happens at the end of the term are all set by the ESCO's contract and negotiated per project. Some ESCO contracts share measured savings; others commit the ESCO to a minimum savings level. Read the measurement-and-verification and end-of-term clauses carefully. Trexon is not an ESCO counterparty and does not take a share of your savings.
What types of energy upgrades does an ESCO project include?
Unlike a standard solar PPA (which only addresses electricity generation), an ESCO project takes a holistic view of energy consumption. Typical measures include: rooftop solar installation, LED lighting retrofits across all zones, HVAC system optimisation and chiller replacement, building energy management systems (BEMS), power factor correction, variable speed drives on motors, and compressed air system upgrades. Trexon can review your bills and design and install the rooftop solar portion, priced per project from your bills.
What happens if the energy savings fall short of projections?
That depends entirely on the ESCO's contract. Some contracts commit the ESCO to cover a shortfall against an agreed baseline; under a shared-savings contract the ESCO's revenue simply falls. Check how the baseline is set, how savings are measured and verified, and what the remedy is. Trexon does not underwrite ESCO savings. If you own a solar system outright, generation risk sits with you as the owner.
Who owns the solar panels and equipment under an ESCO arrangement?
Usually the ESCO (or an SPV it sets up) owns the equipment during the contract term, and the end-of-term transfer terms are set in its contract. Accounting treatment depends on the contract and your auditors. Note that GITA can only be claimed by the company that owns the asset — a building owner that does not own the system cannot claim it.
Is the ESCO model suitable for government buildings and public sector facilities?
Yes — ESCO is particularly well-suited for government buildings, universities, hospitals, and public sector facilities where capital budgets are constrained but energy costs are high. Government buyers procure through ePerolehan tenders.
Not Sure Which Structure Fits?
Trexon will review your bills and price an owned solar system or hire purchase for your building. We do not offer ESCO or PPA contracts directly.
B2B enquiries only. Free quote available for qualifying buildings.
Get a Solar Proposal for Your Facility
Tell us about your facility and we'll price an owned system or hire purchase from your bills.
- Sizing from your 12 months of TNB bills and shift pattern
- Roof, switchboard and single-line diagram reviewed by our engineers
- Available incentives (GITA for solar, subject to MGTC verification) and Solar ATAP eligibility checked for your premises
- SEDA-registered PV Service Provider (RPVSP-2026/373) · SSM 201301044881 (1074704-D)
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