On-bill repayment programs

Spurring clean energy, creating jobs and saving people money

On-bill repayment (OBR) offers an opportunity for customers to choose clean energy and save money at the same time. Rather than continuing to pay for dirty energy from polluting power plants, consumers can obtain cost-effective energy saving measures for their own buildings and homes at no upfront cost.

So how does OBR work? Once qualifying energy-saving projects have been identified, customers can have them installed at no upfront cost. Instead, customers pay for clean energy upgrades over time on their utility bill. All OBR projects are designed to have cost savings that exceed the monthly OBR payment, so consumers save energy and money at the same time, starting on day one.

Unlike utility run energy efficiency programs, OBR does not cost ratepayers or taxpayers money. Instead the upfront cost is borne by qualifying financial institutions, which are repaid over time via the charge on the customer’s utility bill. EDF has been building a coalition of environmental groups, project developers, contractors and financial institutions to help develop OBR platforms that will work for consumers and stakeholders.

The platform can work for single-family, multi-family and commercial buildings. It can also work for both tenant occupied, and owner occupied properties. OBR can accommodate a variety of energy-saving opportunities including equipment purchases, equipment leases, Energy Service Agreements and Power Purchase Agreements.

Benefits of OBR include:

  • Cost savings for customers
  • Energy savings
  • Job creation
  • Reduction of greenhouse gas emissions
  • Avoided cost of new generation capacity and reduced use of higher-cost generation for ratepayers
  • No direct costs to taxpayers or ratepayers
  • Reduced program costs through a scalable platform and standardized processes

OBR provides a new route to funding clean energy, creating jobs and lowering our carbon footprint. On the national level, EDF estimates that expanding low-cost energy efficiency financing, through platforms like OBR, could boost employment job-years by over 600,000 in the next 12 years (a job-year is a full-time job that lasts for one year). And, at scale, EDF estimates that OBR could help drive $87 billion in new clean energy investment, save over $590 billion from customers’ utility bills, and help to avoid 1,100 million metric tons over 12 years, or about 19 million cars off the road.

EDF is building coalitions and securing the necessary regulatory and legislative changes to enact and/or expand OBR programs in California, Hawaii, Illinois, North Carolina, Ohio and Texas.

Graphic: On-bill repayment program

Property Assessed Clean Energy (PACE)

Another clean energy financing program gaining momentum is Property Assessed Clean Energy (PACE). Like OBR, PACE allows customers to take advantage of 100% financing for qualified clean energy upgrades, but instead of repaying the financing as a part of the utility bill, customers make PACE payments with other property taxes and assessments.

Originally PACE focused solely on loans, primarily for energy efficiency projects, but recently PACE programs in California and Connecticut have allowed lease and power-purchase agreements to be placed on the property tax bill. Since most solar projects are financed with these structures, EDF is hopeful that PACE can be a game-changer for the commercial solar market.

So how does PACE work? Once qualifying energy-saving projects have been identified, customers can have them installed at no upfront cost. Instead, customers pay for clean energy upgrades for up to 20 years on their property tax bill. All PACE projects are designed to allow consumers to save energy and money at the same time, starting on day one. Today, commercial PACE financing is available in nine states (and D.C.) through 26 different programs. For more information, please visit www.PACENow.org.