Programs that allow utility customers to borrow for energy efficiency and renewable energy upgrades, and to repay the loan through a surcharge on the utility bill, add debt to already debt burdened families and put low-income households at risk. These programs, referred to as tariffed on-bill financing or “inclusive utility investment,” are loans made to utility customers, often through third parties, to pay for home energy-related improvements or equipment. Borrowers repay the loan through their utility bill, with nonpayment leading to the risk of shutoff of essential utility service, affecting heating, cooling, cooking, and refrigeration.
Creating safe and affordable avenues for households to install heat pumps and other energy upgrades are essential, but this issue brief examines programs as they are currently structured and warns that tariffed on-bill financing’s risks outweigh any benefit.
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