Jamie Fine of the Environmental Defense Fund was guest speaker at the Local Clean Energy Alliance's November 17, 2011 membership meeting, speaking on a proposed state-wide program for financing home energy improvements. On-bill repayment for energy upgrades and/or clean energy installations would allow homeowners and renters to make energy improvements without having to provide any cash up front--financing would be paid back through utility bills.
As described in Jamie's PowerPoint presentation, bank loans secured against utility bills could have much lower interest rates (about 6%) than normal loans. This could enable building owners to perform energy efficiency upgrades for which homeowners and renters save enough money on energy bills to pay off the financing and still come out ahead.
The lively discussion that followed Jamie's presentation revealed some of the limitations and difficulties of the proposal. Interest rates of 6% still make energy upgrades risky unless a building upgrade results in substantial energy savings. This usually means buildings that consume a lot of energy, which generally means more affluent households rather than low-income households. For multi-family residences, the program gives landlords an incentive to upgrade their properties, however tenants, who pay off the financing on their bills, have to be convinced that they will benefit financially. There were also questions raised about the advisability of tying a program to very large banks like Bank of America and Citi Bank, or to Wall Street speculators, rather than community banks and local credit unions.
Subsequent to the November LCEA discussion, Jamie reported that the CPUC announced its intent to work with the Environmental Defense Fund to move on-bill repayment forward: