On-Bill Financing: Helping Homeowners Implement Energy Efficiency Improvements

On-bill financing allows homeowners to implement energy efficiency improvements by receiving low-interest loans from utilities, with repayments added to their monthly utility bills. This model overcomes upfront cost barriers and can achieve 'deep impact' energy savings of 20 percent or more, which traditional rebate programs often fail to encourage. The document distinguishes between tariff-based systems, which tie loans to the meter and can address landlord-tenant split incentives, and on-bill loans, which typically function as non-transferable personal or business loans. A South Carolina pilot program called 'Help My House' demonstrated the effectiveness of this approach, achieving projected average energy savings of 35 percent per home.

• On-bill financing addresses financial barriers to energy efficiency by providing low-interest loans from utilities that are repaid via the customer's monthly utility bill, often resulting in positive cash flow because the repayment term is longer than the energy savings payback period.
• The 'Help My House' pilot program in South Carolina, launched in 2011 with USDA funding, provided 2.5 percent financing for whole-house retrofits. By February 2012, 125 homes participated with average loans of $7,700, resulting in projected average energy savings of 35 percent and nearly 11,600 kWh/year per home.
• There are two primary types of on-bill financing: tariff-based systems and on-bill loans. Tariff-based systems tie the cost to the meter rather than the owner, allowing the loan to transfer to new buyers and potentially solving split incentive issues in rental properties. On-bill loans are generally non-transferable and must be paid off when property ownership changes.
• According to the U.S. Department of Energy, advantages of on-bill financing include secure revenue streams tied to utility disconnects and the ability to use past bill payment as a credit proxy. Disadvantages include utility reluctance to act as lenders, potential exposure to consumer lending laws, and the complexity of setting up tariff-based systems.

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} }