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EESI's On-Bill Financing Primer for Co-ops and Munis


Rural electric cooperatives (co-ops) are an integral of America’s rural communities, providing power to approximately 42 million people in 47 states. There are nearly 850 distribution co-ops and 65 generation and transmission co-ops. Electric co-ops reach 12 percent of the nation’s population, while delivering 10 percent of the total kilowatt-hours sold in the United States each year.  

While co-ops have made great strides to bring energy efficiency programs to their members, major opportunities to cut residential energy waste remain. Many families are unable or unwilling to access traditional energy efficiency programs because they require upfront investments before tax incentives and/or rebates kick in. Low-cost financing, either through a loan or tariff, which requires no upfront payments can significantly broaden the residential energy efficiency market. When the co-op provides this financing, the member can repay their co-op via their now-lowered monthly bill, a process known as “on-bill financing.”

On-bill financing is not a new concept for co-ops. EESI has identified at least 50 co-ops in 23 states with current or recent residential on-bill financing programs. These programs vary widely in structure and goals – some are simply heat pump replacement programs with no energy savings goal. Early adopters such as Butler Rural Electric Cooperative (Ohio) and North Arkansas Electric Cooperative have shown the viability of the general approach since the 1980s. More recently, co-ops in several states (KS, KY, NC, SC) have successfully introduced program design innovations. These exciting changes are reactivating the on-bill financing market.

How EESI Can Help

EESI’s On-Bill Financing Project is an ongoing initiative to work with co-ops and their partners to establish residential energy efficiency repayment programs. EESI will also assist rural utilities with applications to the U.S. Department of Agriculture's Rural Energy Savings Program (RESP) to capitalize their projects. EESI’s work is grant-funded; its program-related assistance is available for free to co-ops and related stakeholders. 

Click here to learn more about how EESI can help

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

The Help My House Model

EESI has experience developing on-bill financing programs through its involvement in a pilot project by South Carolina’s rural electric cooperatives. The pilot, called “Help My House,” financed energy efficiency upgrades for co-op members’ homes that cut participants’ average electricity use by more than a third. These upgrades included new heat pumps, added insulation, duct and air sealing, and other common-sense measures to make the homes more comfortable and energy-efficient. Participants did not pay anything upfront for their home improvements. Instead they repay their utility over time as part their electricity bill. This process is called “on-bill financing.” And because their energy use was significantly down, participants’ total electric bills typically went down even when including the loan payment.

Click here to learn more about Help My House

On-Bill Financing Benefits Everyone

Homeowners and renters are able to access home improvements that lower their energy bills and increase home comfort. The no-money-down approach is especially important for economically vulnerable families, who can greatly benefit from lower energy bills but lack the savings to take advantage of energy efficiency rebate programs.

Local communities benefit through increased economic activity in the service area and region, including job and wealth creation. On-bill financing programs are a boon to home contractors and energy auditors, which in turn supports the entire supply chain of energy efficiency materials.

Co-ops that run on-bill financing programs can benefit in various ways, including reduced per capita energy use and peak load shaving, which can help avoid the need for new power generation facilities and help meet energy reduction goals. These programs have also been shown to increase member satisfaction with their co-op.


How EESI Can HelpFinancing Opportunities • The Help My House Model • Case Studies • FAQ • Resources