On Bill Financing – Is it the Best Financing Option?


It could be.

We first bumped into this concept while working with a Jewelry retailer in California.  They were looking to implement lighting retrofits but the costs were prohibitive relative to what they were willing to finance.

However, we soon discovered San Diego Gas & Electric (SDG&E) was not only offering lucrative rebate offsets for qualifying technologies, but also making on-bill financing available to qualified customers.   In other words, our customer was able to “finance” (pay off over time) the net project cost for 12 months at 0% … right on their electric bill.  It was a no-brainer and they implemented the retrofits in seven local stores and are now reaping the benefits of the energy savings.

According to a report by ACEEE released in December 2011, at least 20 states have implemented or are about to implement on-bill financing programs to alleviate the burden of the high upfront costs of energy efficiency upgrades for both residential and commercial customers.  Seems like a real “win-win”, eh?

So why isn’t this standard practice?  Well, it doesn’t come without its costs to the provider… modified billing systems, risks of non-payment and the obvious cost of capital.  That said, it appears there is an upswing in interest.  According to the ACEEE report, more states are exploring the feasibility of on-bill financing options and others have legislation pending which supports or requires adoption.

I know one thing, if my local utility offered on-bill financing for residential retrofits … I would have installed a higher efficiency A/C unit last fall!

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