ON-BILL FINANCING: EXPANDING ACCESS TO ENERGY EFFICIENCY, CLEAN ENERGY ADOPTION, AND ELECTRIFICATION FOR EVERYONE

This research paper examines on-bill financing as a tool to expand access to energy efficiency, clean energy, and electrification, particularly for low-to-moderate-income (LMI) households and rural communities. It highlights how specific program designs—such as tying obligations to utility meters and using payment history instead of credit scores—can overcome traditional financial barriers and address racial and income disparities in clean energy adoption.

• On-bill financing programs can increase energy affordability and equity for rural and LMI communities by removing upfront costs and utilizing alternative underwriting. Instead of traditional credit scores, these programs often use a history of on-time utility bill payments to determine eligibility, which helps reach households typically disqualified by the traditional financial system.
• Tying the financing obligation to the utility meter rather than the individual allows clean energy upgrades to be accessible to renters and ensures the debt transfers to future owners. This mechanism addresses the 'split incentive' problem where landlords lack motivation to invest in upgrades that primarily benefit the tenant's utility bill.
• The Rural Energy Savings Program (RESP), administered by the USDA's Rural Utilities Service, provides critical no-interest loans to rural utilities to fund on-bill financing. To date, the USDA has loaned over $80 million to 22 rural utilities across 14 states to support these initiatives.
• The Hawaii Green Energy Money Saver (GEM$) program focuses on democratizing clean energy for LMI households, nonprofits, and small businesses. It requires participants to demonstrate a minimum 10 percent net monthly energy savings after installation to ensure a positive cash-flow experience.
• The Orcas Power and Light Cooperative (OPALCO) 'Switch It Up!' program in Washington state focuses on beneficial electrification, replacing fossil-fuel equipment with electric alternatives. Capitalized by a $20.8 million RESP loan, the program aims to finance 100 projects annually over 10 years.
• Loan loss reserves (LLR) are used in innovative on-bill programs to protect both the utility and the participant. These reserves allow utilities to write off bad investments—typically triggered after 90 days of non-payment—while allowing the participant to keep the installed equipment.

APA

YANEZ-BARNUEVO, M. (2020). ON-BILL FINANCING: EXPANDING ACCESS TO ENERGY EFFICIENCY, CLEAN ENERGY ADOPTION, AND ELECTRIFICATION FOR EVERYONE. Environmental and Energy Study Institute. https://www.eesi.org/files/Report-On-Bill-Financing-For-Solar-Energy-Miguel-Yanez.pdf

Chicago

YANEZ-BARNUEVO, MIGUEL. ON-BILL FINANCING: EXPANDING ACCESS TO ENERGY EFFICIENCY, CLEAN ENERGY ADOPTION, AND ELECTRIFICATION FOR EVERYONE. Environmental and Energy Study Institute, 2020. https://www.eesi.org/files/Report-On-Bill-Financing-For-Solar-Energy-Miguel-Yanez.pdf.

Wikipedia

{{cite report |last1=YANEZ-BARNUEVO |first1=MIGUEL |title=ON-BILL FINANCING: EXPANDING ACCESS TO ENERGY EFFICIENCY, CLEAN ENERGY ADOPTION, AND ELECTRIFICATION FOR EVERYONE |publisher=Environmental and Energy Study Institute |date=2020 |url=https://www.eesi.org/files/Report-On-Bill-Financing-For-Solar-Energy-Miguel-Yanez.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yanezbarnuevo2020onbill, author = {YANEZ-BARNUEVO, MIGUEL}, title = {{ON-BILL FINANCING: EXPANDING ACCESS TO ENERGY EFFICIENCY, CLEAN ENERGY ADOPTION, AND ELECTRIFICATION FOR EVERYONE}}, institution = {Environmental and Energy Study Institute}, year = {2020}, url = {https://www.eesi.org/files/Report-On-Bill-Financing-For-Solar-Energy-Miguel-Yanez.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }