On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements

This fact sheet describes on-bill financing as a mechanism to eliminate upfront costs for residential energy efficiency improvements by providing low-interest loans repaid through monthly utility bills. It distinguishes between tariff-based systems, which tie costs to the meter and can address landlord-tenant split incentives, and on-bill loans, which typically function as non-transferable personal or business loans. The document highlights a pilot program in South Carolina that achieved significant energy savings through whole-house retrofits.

• On-bill financing programs aim to remove the initial financial barrier for homeowners by providing low-interest loans where repayments are integrated into the customer's monthly utility bill. This structure is designed to create positive cash flow for the customer by ensuring the loan repayment term is longer than the payback period derived from energy savings.
• There are two primary types of on-bill financing: tariff-based systems and on-bill loans. Tariff-based systems tie the cost of energy efficiency measures to the meter rather than the homeowner, allowing the loan to transfer to new buyers and addressing split incentives in rental properties. On-bill loans generally operate as non-transferable personal or business loans that must be settled when property ownership changes, although some newer versions operate as energy services agreements tied to the meter.
• The "Help My House" pilot program, launched in 2011 in South Carolina through a partnership between EESI, South Carolina co-ops, and a USDA Rural Economic Development Loan and Grant, provided 2.5 percent financing for whole-house retrofits. As of February 2012, 125 homes participated with an average loan of approximately $7,700, resulting in predicted average energy savings of nearly 11,600 kWh/year (a 6.0-year payback) and an average projected energy savings of 35 percent.
• According to the U.S. Department of Energy, on-bill financing offers advantages such as secure revenue streams (linked to utility disconnects), the ability to use past bill payment as a credit proxy, and the capacity to support longer-term investments. However, disadvantages include utility reluctance to act as lenders due to consumer lending laws, the complexity of setting up tariff-based systems, and the requirement for on-bill loans to be paid in full upon the sale of a property.

APA

Environmental and Energy Study Institute (2012). On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements. https://www.eesi.org/files/On_Bill_Financing_070512.pdf

Chicago

Environmental and Energy Study Institute. On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements. 2012. https://www.eesi.org/files/On_Bill_Financing_070512.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements |date=July 2012 |url=https://www.eesi.org/files/On_Bill_Financing_070512.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2012onbill, author = {{Environmental and Energy Study Institute}}, title = {{On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements}}, institution = {Environmental and Energy Study Institute}, year = {2012}, month = jul, url = {https://www.eesi.org/files/On_Bill_Financing_070512.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }