Use USDA funding to start on-bill financing program for efficiency upgrades

A new loan program from the Department of Agriculture (USDA) Rural Utilities Service (RUS) can make energy-efficiency and conservation projects affordable for more consumers, including the hard-to-reach rental market.

The Energy Efficiency Conservation Loan Program helps utility customers finance energy-saving home improvements, like efficient cooling systems, with no upfront costs. (Photo by Environmental and Energy Study Institute)

The Energy Efficiency Conservation Loan Program helps utility customers finance energy-saving home improvements, like efficient cooling systems, with no upfront costs. (Photo by Environmental and Energy Study Institute)

The Energy Efficiency Conservation Loan Program (EECLP) makes investment in efficiency or renewables as easy as paying the electric bill. Utilities that are eligible for the RUS electric program, such as electric cooperatives and public power authorities, can borrow money at or near Treasury rates to relend to customers to make energy-efficiency upgrades on their properties. The loan repayment becomes part of the customer’s monthly utility bill like any other essential utility service. The measure and its benefits stay with the property, and the payments may be transferred along with the meter to the next owner or tenant.

Good for everyone
“EECLP is a win on many levels,” said Emily Stark, executive director of Clean Energy Ambassadors Redirecting to a non-government site (CEA). “The people who are most likely to need help with their utility bills—low-income customers and renters—are able to make building improvements without up-front costs. Building owners get more desirable properties and the community gets a more sustainable building stock. For utilities, it can help them gain more control over their load and make customers happy.”

On-bill financing is such a good idea it is no surprise that many utilities—including some Western customers—have adopted versions of it on occasion to meet load- management goals. Public power providers across the country offer residential on-bill financing programs, some going back more than three decades. Newer programs like Help My House Redirecting to a non-government site, the South Carolina pilot program that served as a model for EECLP, are reinvigorating the on-bill financing market.

Getting started
More than $6 billion per year in low-cost financing is available to eligible electric utilities—those serving rural areas and operating at-cost—similar to the financing RUS offers for power plants, poles and wires. Projects eligible for EECLP funding include renewable energy systems, building energy upgrades, smart grid technologies, combined heat and power, demand response and more.

RUS accepts EECLP applications on a rolling basis, so there are no deadlines. The two-stage application process involves RUS and the utility board of directors first approving the utility’s plan for each proposed program, then considering the application to fund the program. Utilities may confirm their eligibility for EECLP and submit plans for programs they want to offer customers without having to commit to applying for a loan. To get a quick start, consider modeling programs on successful programs other utilities have implemented.

The Environmental and Energy Study Institute (EESI) provides free assistance to rural cooperatives and public utilities interested in applying for EECLP loans. The EESI project team can perform a needs assessment to determine if the program is a good fit for the utility and help the utility navigate the application process. Utilities might also get help identifying additional resources to get projects off the ground, customizing project plans and implementing and troubleshooting projects.

Contact John-Michael Cross at 202-662-1883 or Miguel Yanez at 202-662-1882 for more information. Also, the USDA has a toolkit and PowerPoint presentation with more details on the application process.

Clean Energy Works Redirecting to a non-government site, another CEA partner, also offers assistance to rural cooperatives and public utilities. The nonprofit pioneered the Pay as You Save (PAYS) tariff, a voluntary, on-bill financing system. Roanoake Electric Cooperative Redirecting to a non-government site in North Carolina recently piloted the program and other utilities are adopting PAYS as a model for future projects.

Spreading the word
CEA is eager to alert utilities serving the plains and western states to the opportunity EECLP represents. “This program is relatively new, so eligible utilities may not be aware yet that they have access to this great new tool for helping customers,” Stark said. “We are working with EESI and Clean Energy Works to educate co-ops in this region on these and other upcoming opportunities.”

The USDA presented a webinar on January 2015 giving an overview of the program. CEA and EESI followed up in April with a webinar on federal funding opportunities featuring speakers from EESI and from the USDA Rural Energy for America Program.

Stark added that CEA is interested in partnering with generation-and-transmission cooperatives to let their member systems know about EECLP. “This is a great opportunity for rural co-ops to take member services to a whole new level,” she declared.

Contact Clean Energy Ambassadors at 406-969-1040 to learn more about the Energy Efficiency Conservation Loan Program and how you or your member systems can get involved.