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In the past several years, on-bill financing programs have been gaining attention around the country as a way to finance residential energy efficiency improvements. On-bill financing programs are operating, or under development, in a number of states to eliminate the upfront cost of residential energy improvements for the homeowner by providing a low-interest rate loan.
Rather than having a traditional loan from a bank or lending institution, the on-bill financed loan is with the utility and the loan's repayment is added onto the customer’s monthly utility bill. Along with the convenience of having both energy savings and loan payments on the same bill, the loan's repayment term is structured to be longer than the payback period from the expected energy savings, resulting in a positive cash flow for the customer.
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