An innovative energy-efficiency financing tool that enables homeowners and businesses to pay for retrofits via their utility bills is reaching customers in historically underserved markets, says a new report from the American Council for an Energy Efficient Economy (ACEEE). The study profiles 19 programs in 15 states that offer the mechanism — known as on-bill finance, or on-bill repayment — and finds that they are poised to address financing gaps that up until now have not been addressed by other energy efficiency financing mechanisms.
In addition to improving access to funding for energy improvements, especially for multifamily buildings and small businesses, on-bill programs offer the potential for traditionally credit-constrained customers to gain access to financing through modified underwriting that takes bill payment history into account, said ACEEE in a press release.
In the residential market, a handful of on-bill pilot programs are being tested and refined across the country, in states including Kentucky, Kansas and Oregon, with the hopes of surmounting some of the well-known but formidable barriers that have stymied the market for home retrofits in the past. They include challenges such as high upfront costs, a complex application process and uncertainty over future energy savings.
Earlier this year, New York Gov. Andrew Cuomo signed legislation that will create the first-in-the-nation statewide on-bill repayment program. The law compels the seven utilities operating in New York to provide on-bill repayment for loans for energy efficiency retrofits offered by NYSERDA through the Green Jobs-Green New York program for residential homeowners, multifamily buildings, small businesses and not-for-profit organizations.
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