Bill Would Make Energy Efficiency Cheaper, Easier
State Senator Kevin De León | Photo: Neon Tommy/Flickr/Creative Commons License
Want to increase your home's energy efficiency but can't afford to make the investment? A bill making its way through the California Senate would allow you to borrow the money you need to upgrade, then pay it back on your utility bill -- at a total monthly cost lower than your energy bills were before the upgrade.
Senate Bill 37, authored by Los Angeles area State Senator Kevin De León, and introduced on December 5, would put the state legislature on record as supporting what the energy policy mavens call "on-bill repayment." In an on-bill repayment system, third-party lenders front the money for property owners to make their buildings more energy efficient. Property owners repay the loan in installments on their utility bills. The loan amounts, upgrades, and repayment schedules are configured so that the property owner saves at least as much money on gas and electricity as they pay each month to service the loan. Programs could also include renters, with improvements remaining in the rental property and repayments tied to the utility meter rather than the departing tenant.
In other words, ratepayers have more money in their pockets, lenders earn a little investment income, and California reduces its overall carbon footprint: a win-win-win outcome. As 30 percent of more of the state's greenhouse gas emissions could be reduced through energy efficiency, any program that helps people take common sense steps to cut down energy use should be taken seriously.
Potential on-bill repayment programs might cover everything from insulating and weatherstripping your home to adding rooftop solar to sophisticated Combined Heat and Power systems for small industry.
The bill doesn't directly establish an on-bill payment system, but it would authorize the California Public Utilities Commission to set such a system up. The CPUC has been pushing for on-bill repayment for at least a year, based on a report released by the Environmental Defense Fund in 2011 that examined the benefits and potential pitfalls of on-bill repayment systems in California.
If California does enact an on-bill repayment program for energy upgrades, it would be the nation's first.
"We estimate that an on-bill repayment program that spurs investments in the range of $3 billion annually could create 20,000 jobs and, after five years, reduce annual electricity use and emissions equal to that of 1.6 million cars," said EDF's climate economist James Fine when the report was released. "We have every reason to believe this initiative will also help California meet AB 32 and other long-term clean air goals."
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