EESI’s On-Bill Financing (OBF) Project

The Environmental and Energy Study Institute’s (EESI) on-bill financing initiative – part of its broader Access Clean Energy Savings program – is a nationwide effort to help utilities implement programs that provide cost-effective energy upgrades to homes and businesses. “On-bill financing” is a mechanism where financing repayments are made monthly through an existing utility bill. EESI emphasizes on-bill financing programs that promote equity, affordability, and accessibility through program designs that provide immediate financial and quality-of-life benefits to participating families and that work to include households typically excluded from energy efficiency programs.

EESI’s innovative on-bill financing model first began in partnership with South Carolina rural electric cooperatives (co-ops) to develop the successful “Help My House” program. Now, EESI works with other co-ops and public power utilities (munis) from across the country to explore, design, implement, and evaluate their own on-bill financing programs. This includes helping rural utilities to connect to USDA’s Rural Energy Savings Program, which provides no-interest loans for on-bill programs. EESI’s initiative is grant-funded, allowing EESI to provide this assistance to utilities and related stakeholders for free.

Since 2010, the program has provided free technical assistance to more than 35 utilities in more than 20 states and has helped more than a dozen utilities launch their on-bill programs while helping improve a number of existing programs. (Learn more about EESI-supported OBF programs.)

Learn what a difference "Help My House" made for Diane Taylor of Monetta, SC. Diane is now saving up to $250 a month in energy bills!

The Opportunity

There are more than 900 electric co-ops and 2,000 public power utilities in the United States, all operating on a not-for-profit basis. Combined, they deliver power to 26 percent of U.S. households. These utilities are particularly integral for America’s rural communities because they provide vital services to towns and farms that were ignored by for-profit utilities during the electrification boom of the early 20th century. Despite – or perhaps due to – their small size, co-ops, and munis have been important laboratories for innovative on-bill financing programs. Together, they operate more than 80 on-bill programs, some of which are more than 30 years old. But it is the programs launched over the past decade that have successfully evolved on-bill programs to deliver deeper savings and expand accessibility. These changes have led to national attention, offering the opportunity for great scale and replication.

On-bill financing is an exciting opportunity to expand residential energy efficiency and clean energy efforts into underserved markets. Many families are unable or unwilling to access traditional energy upgrade programs because they require upfront investments before tax incentives and/or rebates kick in. Likewise, many households are unable or unsure of how to access traditional financing programs to invest in energy upgrades. On-bill financing can help overcome this, but the approach works best when projects are designed to be cash-flow positive and applicants are approved through non-traditional means (such as good utility bill payment history instead of credit scores). Some on-bill financing programs expand the potential participant pool further to renters and short-term owners by allowing for the repayment obligation to change hands when the property is sold or new renters move in, helping to break down split-incentive barriers.

On-bill financing programs benefit far more than just participating households and businesses. Local communities benefit through increased economic activity in the service area and region, including job and wealth creation. Utilities that run these clean energy financing programs benefit from improved customer relationships and peak load reductions, which can help avoid the need for new power generation facilities and help meet energy reduction goals.

Chad Lowder, the CEO of Tri-County Electric Cooperative in South Carolina, discusses how rural electric cooperatives, such as his, are helping their members save energy to reduce energy bills.

Getting Started

For more information on EESI's On-Bill Financing project, please click on the following links.

Click here to learn more about how EESI can help

Click here for information about the RESP and other co-op capitalization options

Click here to learn more about Help My House in South Carolina

Click here to explore other EESI-supported on-bill financing programs