Clean Energy Financing Programs Expose Low-Income Customers to Substantial Risk

August 19, 2026 — Press Release

Lack of Affordability Analysis or Guarantee of Energy Savings Put Families at Risk of Utility Shutoff

WASHINGTON – A new issue brief examines loans made to utility customers, often through third parties, to pay for home energy-related improvements or equipment and highlights sizable up-front costs, loans without standardized disclosures, and misleading claims about energy savings and monthly costs.

Tariffed on-bill financing, or “inclusive utility investment,” allows utility customers to take out a loan for energy efficiency and renewable energy upgrades that is repaid through a surcharge on their utility bill. But advocates warn these financing programs increase debt burdens and utility costs and invite the potentially life-threatening risk of utility shut off in cases of nonpayment of the loans through customers’ utility bills – including for subsequent tenants and homeowners.

“While it is important to create safe and affordable avenues for households to install energy upgrades, current tariffed on-bill financing’s risks outweigh any benefit,” said Alys Cohen, director of federal housing advocacy and acting co-director of federal advocacy at the National Consumer Law Center (NCLC). “With utility costs rising and families facing unaffordable bills, issuing loans without essential consumer protections that put families in debt and drive up energy costs is a mistake.”

Tariffed on-bill loans operate similarly to other non-recourse loans that defer payment to future installments and should be subject to the same state and federal lending laws and government oversight as other installment loans. Tariffed on-bill financing also presents additional risks over other installment loans. For example, because payments remain attached to the home, even after the original borrower has moved, new tenants and home buyers need additional protections from surprise, and potentially unmanageable, costs, including: written notice of and consent to the loan obligation on the unit; loan modification based on the new occupants circumstances; early loan pay-off without penalty; and a pause in debt accrual when a home becomes vacant. 

Additional necessary consumer protections and steps to prioritize affordability and promote fairness and accountability include:

• Screening and enrolling low-income customers in zero- or low-cost programs before putting them into a loan.
• Guaranteeing monthly utility bill savings.
• Eliminating large, upfront payments for low-income customers.
• Capping the loan amount to exclude expensive and complex projects and keep payments affordable. 
• Reducing incentives for predatory marketing by holding utilities responsible for the actions of any third-party acting on their behalf.
• Eliminating utility service disconnection as a remedy for nonpayment. 
• Ensuring quality control to limit consumer risk. Allow only screened and certified contractors and provide free repair and maintenance services during the payment period.
• Establishing a complaint and dispute resolution process for customers.

“State and federal funding for home energy improvements is best spent on existing free or low-cost programs to broaden the number of households and measures covered by those programs,” said Berneta Haynes, senior attorney at NCLC. “Tariffed on-bill financing and similar energy financing programs must include necessary consumer protections and should only be considered as a last resort.”

Related Resources

• Issue Brief: Tariffed On-Bill Financing Poses Significant Risks for Low-Income Consumers, March, 21, 2026
• Coalition Letter to CFPB and FTC Regarding Tariffed On-Bill Financing (TOB), September 9, 2024
• Rooftop Solar: Consumer Protection Recommendations, July 12, 2024