The Iowa Association of Municipal Utilities and the Environmental and Energy Study Institute (EESI) held a webinar regarding on-bill financing and, specifically, its applications for member-owned utilities in Iowa. This presentation looked at two on-bill financing (OBF) programs. The first is a successful weatherization loan program run by the Eugene Water and Electric Board (EWEB) in Eugene, Oregon. Iowa’s own Bloomfield Municipal Utility then provided an overview of their on-bill program and their energy independence goals.

“On-bill financing” programs, in which utilities issue loans for energy improvements that are repaid as part of the participating customer’s monthly utility bill, are an exciting opportunity to expand energy efficiency and renewable energy efforts around the country. The most common application is to finance residential energy efficiency upgrades, which can be designed to produce savings that offset or even surpass the monthly loan payment. On-bill financing can also be used to finance non-residential energy efficiency retrofits, renewable energy installations (e.g., solar and wind), and water improvements. The loan repayment is covered in whole or in part with the savings accrued thanks to the energy retrofits. No upfront payments by the customer are necessary.

Successful pilot models and programs have shown that rural electric cooperatives (co-ops) and public power utilities can use OBF programs to expand the uptake of energy efficiency programs and significantly reduce peak demand and fossil fuel use, while improving customer satisfaction and comfort. Because of on-bill financing's ability to use bill payment history, instead of credit checks, to determine loan eligibility, it increases access for low-income households without raising default rates.

EESI has recently expanded its on-bill financing initiative into a national effort to significantly improve the energy efficiency of homes served by co-ops and public utilities. EESI can help rural utilities apply to a new U.S. Department of Agriculture loan program to capitalize their projects. Learn more about EESI's on-bill financing project.