On-bill Repayment: Great Promise, but Challenges Remain
On-bill repayment has received a great deal of attention during the last few years as a potential approach to expanding the reach of energy efficiency financing in the residential and commercial sectors. With on-bill repayment, utilities or third-party lenders cover the upfront cost of energy efficiency retrofits and customers pay back the loans through their utility bills.
Although on-bill repayment programs have many advantages, these programs are still in their infancy and many barriers to widespread deployment remain. One of the programs’ advantages is that they build on utilities’ preexisting customer relationships. Another advantage is that the programs tend to be reliable investments if customers have a track record of paying their utility bills consistently.
However, some barriers still exist. As is the case with most energy efficiency financing mechanisms, lenders and utilities lack market experience with on-bill repayment. Therefore, many different perspectives exist about what is needed for on-bill repayment programs to succeed.