On Bill Financing Cost Free Energy Efficiency

On-Bill Financing: Cost-Free Energy Efficiency

By Jocelyn Durkay | Vol . 22, No. 10 / March 2014

NCSL NewsConsumers, businesses and policymakers interested in using technology to improve energy efficiency can face a significant barrier: the upfront costs of investing in new appliances, boilers, HVAC systems, furnaces, insulation, lighting and weatherization. Some states and utilities are offering a solution known as “on-bill financing,” which provides loans or tariffs for these upgrades that are incorporated into charges on utility bills. Many on-bill financing programs are “bill-neutral,” meaning energy efficiency savings on monthly bills must be greater or equal to a customer’s loan payments. Policymakers have encouraged on-bill financing programs in a number of states by establishing revolving loan funds, creating pilot programs or requiring utilities to adopt an on-bill financing program.

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