How do Loan Programs Work?
The utility itself or third-party lending partner offers loans for efficiency improvements at interest rates that are typically lower than what's available in the market. Often, the utility will "buy down" the interest rate available from participating banks, and offer a lower "blended" rate to its customers. Most programs are structured so the loan can to be paid back primarily from energy savings.
The overwhelming majority of the more than 150 energy efficiency financing programs in the country fall into this category. Still, there is no one-size-fits-all model and these programs operate with varying levels of success. The right program elements for your utility will depend greatly on who you are trying to reach and what will attract them to participate. One best practice recommendation highlighted in many of the resources here is that loan programs should be offered in conjunction with audit programs. A corollary recommendation is that you should always train local contractors about your loan product and provide them with marketing materials - they are your de facto sales force.
CEEP is seeking more public power specific case studies in this area. If you have a success story to share, you can upload information directly into the resource library, and contribute to discussions, or contact us to have your utility's program profiled in a case study.