On-Bill Repayment: Repaying Clean Energy Investments on Utility Bills

Abstract

Clean energy investing is a proven yet mostly untapped opportunity for improving Americas’ economic and environmental prospects. There is massive potential for profitable investment in energy efficiency (EE) and localized distributed generation (DG), but there are fundamental challenges. Environmental Defense Fund’s (EDF) proposed solution—on-bill repayment—enables building owners and renters to repay clean energy investments on their monthly utility bills.

In this Working Paper, EDF describes how on-bill repayment (OBR) can help the New York metropolitan region to achieve, and exceed, clean energy goals. OBR is an evolutionary step forward from inherently limited on-bill financing and thus will help to harvest the great reservoir of economically attractive energy efficiency and distributed energy resources, such as rooftop photovoltaic electricity generation. On-bill financing (OBF) has proven successful, but it relies on ratepayer or taxpayer funds, which undermine its ability to achieve significant scale. Unlike OBF, OBR uses no public or ratepayer funds while providing a simple and scalable platform for private investment.

This paper lays out EDF’s proposal for OBR as a way to enhance investment in energy efficiency and localized distributed generation in order to meet regional goals for renewable energy, carbon reduction, and affordability. We present the qualitative and quantitative benefits of OBR in terms of job generation, investment dollars, avoided energy costs and avoided pollution. We outline several cornerstone program elements identified by EDF for a successful, scalable on-bill repayment program.

This paper is one in a series of Working Papers produced by the joint program of the Lincoln Institute of Land Policy and Regional Plan Association originally presented on June 26, 2013 in New York City.