Paying for energy-efficiency improvements through utility bills

A recent study by the American Council for an Energy-Efficient Economy finds that on-bill financing, which allows customers to pay for energy-efficiency investments though utility bills, is becoming more widely available across the country.

A recent study by the

American Council for an Energy-Efficient Economy-“On-Bill Financing for Energy Efficiency Improvements: A Review of Current Program Challenges, Opportunities, and Best Practices”- finds that on-bill financing, which allows customers to pay for energy-efficiency investments though utility bills, is becoming more widely available across the country and extending opportunities to historically underserved markets such as rental, multifamily buildings and small businesses. There is also potential for credit-constrained customers to gain access to financing through modified underwriting that takes bill payment history into account.

Energy-efficiency loan programs such as on-bill financing are a low-risk investment, the ACEEE report says; default rates for on-bill programs are frequently less than 2%. There is evidence to suggest that customers tend to prioritize the payment of utility bills, which contributes to low default rates.

This comes at a time when utility companies are increasing their energy-efficiency program budgets. A recent study by the

Consortium for Energy Efficiency-“State of the Efficiency Program Industry: Budgets, Expenditures and Impacts”- shows that total gas and electric budgets in North America reached $9.1 billion last year, an increase of 21% from 2010. Across sectors, customers saved a total of $13.3 billion off their bills, topping 2010. Since 2007, U.S. and Canadian electric and gas efficiency program budgets have grown from $3.7 billion, despite a weak economy.

The report states that since 2007, electric budgets have increased 144% and electric savings have increased 80%. Gas budgets increased 160%, while gas savings soared 453%.

Kelly Faloon was a former editor of Plumbing & Mechanical as well as the BNP Media Plumbing Group’s Integrated Content Development Specialist. She also was a former editor of the Radiant Comfort Guide the Radiant & Hydronics Report — both official publications of the Radiant Professionals Alliance — and twice-monthly Radiant & Hydronics eNews, an enewsletter for anyone interested in the world of heating with hot water.

Her editorial specialties included women in plumbing, recruiting for the trades, green construction techniques, water conservation, water treatment, hydronic heating, radiant heating and cooling, snow melt, solar thermal and geothermal.

After a 3½-year stint at sister publication Supply House Times, Faloon joined the PM staff in December 2001 as senior editor. She was named PM’s managing editor in 2006 and editor in 2013.

Previously, she spent nearly 10 years at CCH, a publishing firm specializing in business and tax law, where she wore many hats — proofreader, writer/editor for a daily tax publication, and Internal Revenue Code editor.

A native of Michigan’s northern Lower Peninsula, Faloon is a 1986 journalism graduate of Michigan State University.

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