“On-bill financing” is a term typically used to describe loan programs for home energy efficiency improvements where the loan is paid back through an extra charge on a customer’s electricity bill. This is not a novel idea, as it has been implemented on various scales and in various forms by municipalities, electric cooperatives (“co-ops”) and even large for-profit utilities across America.
Additionally, loans for energy efficiency retrofits might not sound very exciting to the average American citizen who understands what a loan is, and more and more, what it is like to face debt for years on end. However, on-bill financing is not just another loan program.
The concept of on-bill financing has emerged as an effective and affordable way to help low- and middle-income residents overcome financial barriers to saving energy and money, improving the value of their home, and living a more comfortable life, while at the same time reducing the environmental impacts associated with burning fossil fuels to produce electricity and heat. The goal of such loans is to finance home energy improvements that result in a net savings for the resident, rather than a net cost.
For these reasons, Appalachian Voices, through our Energy Savings for Appalachia program has been hitting the road to promote on-bill financing as a way to help residents save energy and money while promoting economic development and environmental protection at the same time.