inclusive-financing-programs-for-solar-and-electrification

The document examines on-bill financing as a tool to overcome financial barriers to clean energy adoption, specifically for low-and moderate-income (LMI) households and renters. It highlights design features such as using utility payment history instead of credit scores and tying obligations to the utility meter to solve the 'split incentive' problem for renters. The report provides case studies of the Hawaii Green Energy Money Saver (GEM$) and Orcas Power and Light Cooperative's (OPALCO) Switch It Up! programs, demonstrating how these models facilitate the installation of solar PV and beneficial electrification projects while ensuring positive cash flow for participants.

• On-bill financing programs can increase energy equity by removing upfront costs and utilizing alternative underwriting, such as 12 months of on-time utility bill payment history, instead of traditional credit scores to determine eligibility.
• Tying the financing obligation to the utility meter rather than the individual allows the cost to transfer to subsequent owners or renters, which addresses the 'split incentive' issue that often prevents landlords from investing in energy upgrades for tenants.
• The Rural Energy Savings Program (RESP), a no-interest loan program from the USDA's Rural Utilities Service, provides critical capital for rural utilities to implement these financing models; the USDA has loaned over $80 million to 22 rural utilities in 14 states.
• The Hawaii Green Energy Money Saver (GEM$) program focuses on solar PV and energy efficiency, requiring participants to demonstrate a minimum 10 percent net monthly energy savings to ensure a positive cash-flow experience.
• The Orcas Power and Light Cooperative (OPALCO) 'Switch It Up!' program in Washington focuses on beneficial electrification, such as replacing propane equipment with electric heat pumps and installing EV charging stations, funded by a $20.8 million RESP loan.
• Loan loss reserves (LLR) are used in innovative on-bill programs to protect the utility and support participants; these are typically triggered after three consecutive billing cycles (90 days) of non-payment.

APA

Yañez-Barnuevo, M. (2021). inclusive-financing-programs-for-solar-and-electrification. Environmental and Energy Study Institute. https://www.eesi.org/papers/view/inclusive-financing-programs-for-solar-and-electrification

Chicago

Yañez-Barnuevo, Miguel. inclusive-financing-programs-for-solar-and-electrification. Environmental and Energy Study Institute, 2021. https://www.eesi.org/papers/view/inclusive-financing-programs-for-solar-and-electrification.

Wikipedia

{{cite report |last1=Yañez-Barnuevo |first1=Miguel |title=inclusive-financing-programs-for-solar-and-electrification |publisher=Environmental and Energy Study Institute |date=12 February 2021 |url=https://www.eesi.org/papers/view/inclusive-financing-programs-for-solar-and-electrification |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yaezbarnuevo2021inclusivefinancingprogramsforsolarandelectrification, author = {Yañez-Barnuevo, Miguel}, title = {{inclusive-financing-programs-for-solar-and-electrification}}, institution = {Environmental and Energy Study Institute}, year = {2021}, month = feb, url = {https://www.eesi.org/papers/view/inclusive-financing-programs-for-solar-and-electrification}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }