Federal financing options for on-bill financing energy efficiency programs

This guide outlines three federal financing programs offered by the US Department of Agriculture’s Rural Utilities Service (RUS) to help rural electricity providers develop commercial and residential energy efficiency loan programs, specifically focusing on on-bill financing options.

• The Energy Efficiency and Conservation Loan Program (EECLP) allows rural electric cooperatives and public power authorities to borrow funds at Treasury rates plus 0.125% for energy efficiency and renewable energy investments. The program has the authority to provide over $6 billion in loans annually, and borrowers can add a 1.5% markup to loans provided to end-customers.
• The Rural Economic Development Loan and Grant (REDLG) program provides zero-interest loans or grants to local utilities to support projects that create or retain rural employment. In FY 2014, approximately $91 million was available for zero-interest loans and $10 million for grants, though projects require a 20% in-kind match.
• The Rural Energy Savings Program (RESP) is specifically designed for on-bill financing, where rural electricity providers receive zero-interest loans from the RUS and re-lend them to customers for energy efficiency improvements. The primary borrower can charge the end-user a maximum interest rate of 3%, with the earned interest used for loan loss reserves or program costs.
• The RESP program was established by the Agriculture Act of 2014 and received an $8 million appropriation in December 2015 to act as a credit subsidy. This appropriation is expected to leverage approximately $50 million in zero-percent loans, with a total potential availability of up to $75 million per year through 2018.
• To qualify for RESP loans, the energy efficiency measures implemented must be cost-effective and achieve a payback period of 10 years or less. Additionally, the program requires the inclusion of energy audits and measurement and verification services.
• Eligible borrowers for the EECLP include 'public bodies' such as municipalities and counties, as well as 'non-public' bodies like cooperatives and federally recognized Indian tribes. Municipal utilities may qualify if they primarily serve customers outside of cities with more than 20,000 people.

APA

Environmental and Energy Study Institute (n.d.). Federal financing options for on-bill financing energy efficiency programs. https://www.eesi.org/files/USDA_OBF_financing_options.pdf

Chicago

Environmental and Energy Study Institute. Federal financing options for on-bill financing energy efficiency programs. n.d. https://www.eesi.org/files/USDA_OBF_financing_options.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Federal financing options for on-bill financing energy efficiency programs |url=https://www.eesi.org/files/USDA_OBF_financing_options.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitutendfederal, author = {{Environmental and Energy Study Institute}}, title = {{Federal financing options for on-bill financing energy efficiency programs}}, institution = {Environmental and Energy Study Institute}, url = {https://www.eesi.org/files/USDA_OBF_financing_options.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }