May 20, 2024 — Press Release

Advocates Provide Recommendations for Transparent and Affordable Energy-Efficiency Financing

WASHINGTON – More than a quarter of U.S. households are struggling to meet their energy needs, and many face the risk of utility service termination and home loss as a result. Renewable energy and energy-efficiency technologies provide valuable opportunities for reducing energy bills, but only if they include robust consumer protections for low- and moderate-income consumers. 

A chapter in the new book, What’s Possible: Investing NOW for Prosperous, Sustainable Neighborhoods, recommends consumer protections for energy-efficiency financing to ensure that all households can meet their energy needs without financial risk.

“High energy costs often force low-income families into a ‘heat or eat’ conundrum,” said Alys Cohen, senior attorney at the National Consumer Law Center and co-author of the chapter. “To ensure access to sustainable home improvements, greater disaster resilience, and more affordable bills, energy financing programs must include significant consumer protections.” 

The chapter, Ensuring Consumer Protections in the Delivery of Energy-Efficiency Financing and Renewable Energy Programs, recognizes energy insecurity as a racial justice issue, identifies consumer protections as a critical component of any energy­ efficiency financing program, and calls for increased affordability, transparency and accountability, and data-informed program development.

Dilapidated housing contributes significantly to high energy burdens in low-income populations and communities of color. Fifty-two percent of Black households and 47% of Latino households reported instances of energy insecurity, compared with 23% of white households. Low-income households and communities of color are also more likely to live in areas where climate change is projected to cause significant increases in asthma and heat-related deaths. 

Environmental advocates, states, and the federal government have promoted energy-efficiency financing programs to increase low-income households’ access to affordable weatherization, electrification, and more efficient HVAC and appliances. However, unlike the federal Weatherization Assistance Program and other zero-cost, utility-sponsored energy efficiency financing programs for low-income households add surcharges to monthly utility or mortgage bills. 

“Financial products only help financially struggling households if consumer protections are ensured and monthly bills are affordable,” said Karen Lusson, senior attorney at the National Consumer Law Center and co-author of the chapter. “Energy-efficiency financing programs can carry significant risk for households with little to no discretionary income.”

The chapter includes the following recommendations for robust consumer protections necessary for energy efficiency financing programs, including tariffed on-bill (TOB) financing, rooftop solar, Property Assessed Clean Energy (PACE), and government-backed single-family green mortgages: 


  • Policymakers must increase funding for programs that expand access to zero-cost affordable weatherization and solar.
  • Financing programs should not be marketed directly to low-income customers who can obtain the same measures cost-free through other programs. 
  • Integrating (braiding) rebates and other incen­tives into existing energy-affordability programs represents a critical step in making improvements affordable and their delivery efficient.
  • Projected energy savings that are not guaranteed to occur should not serve as justifications for surcharges that may be unaffordable.

Transparency and Accountability

  • Policymakers should require energy audits performed by independent parties with no financial incentive in a potential financing project to ensure homeowners receive useful information about ways to improve energy efficiency
  • Consumers should receive clear, written disclosures, in their preferred language, that explain costs and terms, with a waiting period before consummation and a right to cancel for a period after the transaction.
  • Regulations should not allow contractors who would do the work to market any of these financing programs, due to the financial incentive they may have in the sale.

Data-Informed Programs

  • Meaningful data on financing and product perfor­mance, including demographic data, should be collected and published to ensure equitable and sustainable program design.

“As energy efficiency programs get off the ground with implementation of the Inflation Reduction Act, including the Greenhouse Gas Reduction Fund, financing programs can truly help the people they are meant to serve only if they reduce risks to consumers and enable households to affordably meet their energy needs,” Cohen added

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