Many North Carolinians, myself included, only think about electricity when we flip the switch and the lights don’t come on.
Reducing electricity usage and conserving can be a distant thought at best. But really, anyone who gets a kick out of finding a “deal” or clipping coupons should be interested in energy efficiency, which can save residents and businesses significant amounts of money. The thrill of that savings can be muted, though, since that savings only materializes with time, after the measures have been implemented. And, for a household or business without much cash on hand, or an inability or unwillingness to take on additional debt, unlocking those savings can be challenging.
“Don’t approach energy efficiency in a vacuum,” Marilynn Marsh-Robinson of Environmental Defense Fund’s said while talking about designing energy efficiency programs during a panel at the 2017 UNC Clean Tech Summit.
Marsh-Robinson stressed the importance of meeting utility customers where they are. Customers, particularly lower income customers, are dealing with a variety of priorities that mean energy efficiency is a long way down the list. To achieve significant reductions in energy use, we need to find ways to connect energy efficiency with these “kitchen table issues” being discussed over dinner every night.
Other panelists echoed Marsh-Robinson. Chief Operating Officer of the Roanoke Electric Cooperative, Marshall Cherry, brought attention to rural and urban equality in terms of energy, and the importance of providing quality, affordable electricity to historically marginalized populations.
Enter innovative program designs like on-bill finance, which promise to reduce the high upfront costs of energy efficiency improvements. In on-bill finance, the program pays for the cost of an energy efficiency improvement, and the customer gradually pays the cost back over time through an additional charge on their energy bill each month.
After the installment of the upgrade, a property will use less energy than it previously did. Programs can be designed so the repayment charge is less than the energy savings, immediately resulting in a lower overall bill.
Roanoke Electric Cooperative’s Upgrade to $ave program is designed to achieve exactly that. Roanoke (via a loan from the USDA) pays the upfront cost of energy efficiency upgrades and shares a portion of the savings with customers, while the remainder goes toward paying back the improvements.
Roanoke’s program is meter-attached financing, in which, as the name suggests, the debt is tied to the meter and not the individual occupant. The customer doesn’t need to worry, therefore, that they will be stuck with a debt should they move in the future—the obligation stays with the meter and passes on to the next occupant. This also means that the program can work for both owners and renters.
On-bill financing programs can be hugely beneficial for customers, and the nature of paying back the charge on the bill means they can be a less costly option for utilities than traditional rebates. But, program implementation and administration is no small feat. To begin with, the utility’s billing system needs to be able to handle placing the new, customized charge on a customer’s bill.
Tim Duff, Duke Energy general manager of retail customer and regulatory strategy, explained at the Summit that Duke’s billing system requires a major overhaul to be able to handle on-bill.
“The big hurdle with on-bill financing for the utility is getting it to work within its billing system,” Duff said.
Duff further explained that Duke Energy’s billing system in North Carolina is over 20 years old, and an on-bill program alone cannot necessarily justify an investment into a new billing system or modifications for the existing billing system.