On-bill financing, a relatively new tool that allows customers to pay for energy efficiency investments though their utility bills, is extending opportunities to underserved markets, according to a new study released today by the American Council for an Energy-Efficient Economy (ACEEE).

The study profiles 19 existing on-bill financing programs in 15 states. ACEEE finds that these programs are poised to address financing gaps that have not been historically addressed by other energy efficiency financing mechanisms.

Download report (registration required):

On-Bill Financing for Energy Efficiency Improvements: A Review of Current Program Challenges, Opportunities, and Best Practices

“The great thing about on-bill repayment is that it can serve a broad array of markets with diverse needs. It is a versatile financing tool that can be combined with a variety of different sources of capital and implementation strategies,” said Casey Bell, lead author of the report, in a media statement.

Programs can be tailored to meet the needs of industrial, commercial, and residential customers. In some cases, energy savings are sufficient to cover the monthly payments for on-bill financing.

ACEEE Executive Director Steven Nadel noted that on-bill financing programs can improve access to funding for energy efficiency investment, especially for historically underserved markets such as rental, multifamily buildings, and small businesses.

Many of the programs studied have participation rates of less than one percent of eligible customers. The programs face some perceptual challenges, as well as some real barriers such as the cost to modify energy utility billing systems.

As the number of on-bill programs grows, Bell said, “we anticipate many opportunities to learn from experience.”