OBF for Distributed Solar

This guide explains how on-bill financing (OBF) can increase the adoption of distributed solar energy by removing financial barriers for families and businesses, particularly those in underserved communities.

• Distributed solar consists of small arrays that provide electricity directly to the attached building and, when paired with battery storage, can maintain power during outages to improve community and grid resilience. These systems assist states and utilities in achieving 100 percent renewable energy targets while providing direct community benefits.
• Despite a decrease in photovoltaic (PV) costs of over 60 percent in the last ten years, the initial investment for solar panels remains a barrier for many. On-bill financing is one of several options—alongside solar loans, leasing, and power purchasing agreements (PPAs)—that can be combined with net metering, tax credits, and rebates to reduce costs. OBF specifically allows utilities to manage financing within their service territories and integrate payments into bills to expand eligibility.
• Solar adoption is currently unequal across racial and income lines. Compared to census tracts with no majority, majority-white tracts have 21 percent higher adoption, while majority Black and Hispanic tracts have 69 percent and 30 percent fewer rooftop installations, respectively, even when controlling for homeownership and income. On-bill financing aims to address these disparities by allowing rural communities and communities of color to install solar with no upfront costs.

APA

Environmental and Energy Study Institute (n.d.). OBF for Distributed Solar. https://www.eesi.org/obf/how-obf-works/obf-for-distributed-solar

Chicago

Environmental and Energy Study Institute. OBF for Distributed Solar. n.d. https://www.eesi.org/obf/how-obf-works/obf-for-distributed-solar.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=OBF for Distributed Solar |url=https://www.eesi.org/obf/how-obf-works/obf-for-distributed-solar |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitutendobf, author = {{Environmental and Energy Study Institute}}, title = {{OBF for Distributed Solar}}, institution = {Environmental and Energy Study Institute}, url = {https://www.eesi.org/obf/how-obf-works/obf-for-distributed-solar}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }