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

The paper argues that well-designed on-bill financing programs remove financial barriers for low- and moderate-income (LMI) households by eliminating upfront costs and using utility payment history instead of credit scores for underwriting. It highlights that tying financing obligations to the utility meter rather than the individual allows renters and subsequent homeowners to benefit from upgrades, solving the 'split incentive' problem. The author presents two case studies: the Hawaii Green Energy Money Saver (GEM$) program, which focuses on solar PV and energy efficiency, and the Orcas Power and Light Cooperative (OPALCO) Switch It Up! program, which emphasizes beneficial electrification. Both programs report zero defaults in their first year of operation, demonstrating the viability of alternative underwriting and the use of loan loss reserves to manage risk.

• On-bill financing programs can increase energy affordability and equity for rural and LMI communities by removing upfront costs and using alternative underwriting based on utility bill payment history rather than traditional credit scores.
• Tying the financing obligation to the utility meter instead of the individual allows the debt to transfer to new owners or renters, which addresses the 'split incentive' issue where landlords lack motivation to invest in efficiency for tenants.
• The Hawaii Green Energy Money Saver (GEM$) program, funded by a green bank, provides financing for solar PV and energy efficiency to LMI customers of Hawaiian Electric Companies (HECO), requiring a minimum 10 percent net monthly energy savings to ensure positive cash flow.
• The Orcas Power and Light Cooperative (OPALCO) Switch It Up! program in Washington state uses a $20.8 million no-interest loan from the USDA's Rural Energy Savings Program (RESP) to finance beneficial electrification, such as replacing propane heating with electric heat pumps.
• Both the GEM$ and OPALCO programs utilize loan loss reserves (LLR) to protect the utility and participants, allowing the utility to write off investments if a participant fails to make payments for three consecutive billing cycles.
• Rural Americans face significantly higher energy burdens than urban residents, paying on average 40 percent more for energy, which exacerbates the need for equitable financing tools.

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} }