Natural Gas Energy Efficiency Financing Programs

Report August 31, 2015

More regulators are allowing efficiency programs to offer loans; however, in some states such programs are prohibited. Also a number of program administrators have experienced challenges with efficiency financing. For example, a number of measures may not qualifying, because they fail to meet the cost-effectiveness threshold. As with other programs, poor customer uptake may be the culprit.

Despite the challenges, many continue to add financing options, and a number of administrators consider their loan program a success, particularly when loans are combined with other financial incentives. For example, one program reported that its home retrofit financing package continues to be popular and heavily subscribed by customers. The combination of loans and cash rebates allowed some to significantly exceed program participant and savings goals. Also combining gas and electric measures in residential on bill financing programs has proven successful for some combination programs, with a high level of participation among customers.

Although there are challenges associated with an efficiency loan program, this important tool serves as motivator for customers to move forward with cost effective efficiency projects, reducing their immediate out of pocket investment. It also puts higher tiered efficiency products within the reach of customers by making the investment more affordable.

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