The California Public Utility Commission is accepting comments through January 25 and holding workshops February 8-10 on a proposal by Environmental Defense Fund (EDF) to create the nation’s first statewide on-bill repayment (OBR) program for energy efficiency and solar energy upgrades to be financed entirely by third parties.
The “OBR” program as it’s becoming known presents the opportunity to take energy efficiency to scale—we’re talking in the billions of dollars—on all types of buildings without using taxpayer or ratepayer funds. It could work not just for commercial buildings but for residential and industrial properties too. And it might be ready to go within a year.
It’s just the kind of program we here at The Energy Fix like to showcase for its innovative and cost-effective approach. This effort also stands to create a robust marketplace for energy efficiency lending, create new efficiency jobs throughout the country, lower financing costs for distributed solar projects and save consumers money even with the financing costs.
EDF is building a coalition of environmental groups, financial institutions, contractors and project developers that support and want to participate in on-bill repayment programs. The private feedback to EDF from utilities and consumer advocates suggests they are interested but not yet enthusiastic about on-bill repayment. If California’s utilities take a constructive approach, the business opportunity seems huge for the industry — including utility company shareholders — property owners and business and consumer lenders.
In an interview this week with The Energy Fix, EFF Energy and Financial Policy Specialist Brad Copithorne said a key to success will be convincing utilities and banks that this program and others like it can scale up easily.
“If we set this up properly, we think we can execute this in residential, commercial and even some industrial facilities. The key to this is that (we’ll be) using other people’s money, i.e. the bank’s money.”
Copithorne asserted that with ratepayer or taxpayer money involved, the state has a strong incentive, an obligation even, to ensure that the money is spent only on the most deserving projects. With bank money instead, such a program can be streamlined and relax some of the restrictions that would handicap a more publicly-funded and monitored scheme.
“We think we’ve got a lot more flexibility to do things because we’re using lender money,” he said. That flexibility stands to enhance the program’s appeal from the lenders’ perspective by adding rooftop solar as a qualifying expenditure.”
He added: “By including renewables in this you’re actually going to get a lot more energy efficiency done because you’ll have more banks out there competing for customers, competing for contractors trying to do deals.”
Listen below to Copithorne walk-through EDF’s model and how it makes sense for U.S. utilities and lenders in California and elsewhere (about 5 minutes).
A final decision from the CPUC could come as early as April. With that, the OBR program could start in early 2013.