OVERCOMING THE BARRIERS TO ENERGY-RELATED INVESTMENTS WITH AN ON-BILL FINANCING PROGRAM

The document defines on-bill financing (OBF) as a mechanism where energy improvement costs are repaid via monthly utility bills. It argues that OBF reduces high up-front costs and expands access to financing by using utility payment history instead of traditional credit scores. The guide provides four case studies from Kansas, South Carolina, Florida, and Oregon, demonstrating that OBF can support a range of upgrades from weatherization to solar PV with very low default rates (typically under 3%).

• On-bill financing (OBF) addresses the primary barriers to energy investments—high up-front costs and lack of accessible financing—by allowing customers to repay improvements through their monthly utility bills.
• OBF programs can increase inclusivity by using utility bill payment history for underwriting rather than traditional credit checks; programs using this method reject approximately eight times fewer applications than those using traditional criteria.
• OBF is characterized as a low-risk lending strategy, with evaluations of active programs showing very low default rates between 0 and 3 percent.
• The How$mart program by Midwest Energy in Kansas uses a tariff-based OBF model tied to the location rather than the individual, which allows for the disconnection of service for non-payment and has resulted in 1,411 upgrades and 3.1 million kWh of electricity savings.
• The City of Tallahassee Utilities in Florida has operated an OBF program since 1983, providing $130 million in loans for 17,000 retrofits with a default rate of approximately 1 percent.
• The Eugene Water and Electric Board (EWEB) in Oregon offers zero-percent interest loans for residential members, and participation in its program doubled after the city council approved a Community Climate and Energy Action Plan in 2010.
• A pilot program by South Carolina’s Central Electric Power Cooperative (CEPCI) achieved an average electricity reduction of 34 percent in participating homes, with annual energy savings exceeding loan repayments by $288.

APA

Environmental and Energy Study Institute (2015). OVERCOMING THE BARRIERS TO ENERGY-RELATED INVESTMENTS WITH AN ON-BILL FINANCING PROGRAM. https://www.eesi.org/files/OBFprimer.pdf

Chicago

Environmental and Energy Study Institute. OVERCOMING THE BARRIERS TO ENERGY-RELATED INVESTMENTS WITH AN ON-BILL FINANCING PROGRAM. 2015. https://www.eesi.org/files/OBFprimer.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=OVERCOMING THE BARRIERS TO ENERGY-RELATED INVESTMENTS WITH AN ON-BILL FINANCING PROGRAM |date=September 2015 |url=https://www.eesi.org/files/OBFprimer.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2015overcoming, author = {{Environmental and Energy Study Institute}}, title = {{OVERCOMING THE BARRIERS TO ENERGY-RELATED INVESTMENTS WITH AN ON-BILL FINANCING PROGRAM}}, institution = {Environmental and Energy Study Institute}, year = {2015}, month = sep, url = {https://www.eesi.org/files/OBFprimer.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }