On-bill repayment programs for energy storage, like other energy efficiency upgrades, provide a financing mechanism that allows property owners to install energy-saving measures without upfront costs. These programs involve third-party lenders or utilities that cover the initial expenses, with repayment made through additional charges on the utility bills. Here’s how they generally work:
Key Features of On-Bill Repayment Programs for Energy Storage:
- No Upfront Costs: Property owners do not pay anything upfront for the energy storage system, as third-party lenders or utilities fund the installations.
- Repayment Through Utility Bills: Repayment is handled via monthly utility bills, often through a voluntary tariff. This approach simplifies the repayment process and ensures consistent payments.
- Energy Savings: Typically, these programs are designed to ensure that energy savings from the upgrades are equal to or greater than the monthly repayment amount, resulting in “bill neutrality” or even net savings for customers.
- Eligibility Criteria: Eligibility often requires property ownership within participating utility service areas and satisfactory payment history (e.g., no recent late payments or shutoff notices).
- Ownership and Transfer: The upgrades become the property owner’s at installation. If a property is sold before the loan is fully repaid, the new owner may assume the remaining payments as part of the utility bill.
Benefits and Design Considerations:
- Financial Accessibility: These programs make energy storage more accessible by eliminating upfront costs and offering flexible repayment terms tied to utility bills.
- Stability and Low Default Rates: On-bill programs often have low default rates, as payments are integrated with utility bills and can use utility payment history instead of traditional credit checks.
- Environmental Impact: By facilitating energy efficiency and electrification upgrades, these programs help reduce energy consumption and emissions.
However, specifics can vary by program and utility provider, so it’s essential to check with local utilities for detailed eligibility criteria and program terms.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-on-bill-repayment-programs-for-energy-storage-work/
