On-bill repayment makes energy efficiency available to almost all utility customers, including those who may not qualify for existing loan programs using standard underwriting criteria.

“If you ever want energy efficiency and renewables to compete head-to-head with buying energy, you have to buy them as a service,” said Dave Carey, Principal of Harcourt Brown & Carey, a consulting firm specializing in clean energy finance. On-bill repayment can be viewed as a service because it can be packaged with utilities’ other services.

Carey said that while 50 to 60 percent of residential customers are approved for energy efficiency loans currently, on-bill repayment could increase that figure to 95 percent or more. While it is important to increase loan approvals to expand customer access to energy efficiency finance, programs also need to consider the risk that higher numbers of approvals could lead to greater loan default rates.

According to Carey, there are four main components of on-bill repayment, all of which depend on the choices of program developers; programs rarely have all four of them. These components are: a payment which is on the utility bill, a shutoff option for non-paying customers, a requirement that the cash flow resulting from the investment stay positive, and an option to transfer the cost to new property owners. While these components are intended to strengthen on-bill repayment programs, some of them can be controversial and difficult to implement.

via On-Bill Repayment Shows Great Promise for Energy Efficiency, But Significant Challenges Remain | Renewable Energy News Article.