Cut Costs and Go Green with Utility Energy Efficiency Loans

Posted by on December 12, 2011 in Small Business Efficiency [ 0 Comments ]

In 2007, San Diego Gas & Electric pioneered an innovative zero percent loan program that allowed businesses as well as institutional and government customers to finance new energy-efficient equipment on their utility bills.

Known as On-Bill Financing, similar programs are now available from most of California’s major utilities as well as utilities in other states like Connecticut, Illinois, Massachusetts and Michigan. So far, 900 commercial customers in San Diego have acquired $21.5 million in state-of-the-art energy-efficient equipment through the program saving an estimated 55 million kilowatt hours (kWh) of electricity, 185,000 therms of natural gas and more than $7 million in energy costs each year (based on average kWh and therm rates of participants).

The National Small Business Association recently found that America’s small businesses could reduce greenhouse gas emissions by 259 million tons each year if they improved their energy efficiency by 25 percent. On average, this could save each small business close to $5,000 per year on their natural gas and electricity bills.

With no money down, no interest payments, and long-term energy and cost savings, it’s worth investigating whether your business could green its operations from a similar utility offer. Here’s how On-Bill Financing typically works:

  • Check your utility’s rebate and incentive programs to see if the equipment you need qualifies for this type of financing.
  • If you are not sure what type of equipment you need or what the cost savings potential is, your utility may be able to direct you to consultants to help you understand your options.
  • At SDG&E, there are no up-front costs or credit checks to qualify, but you do need to be a utility customer in good standing. These requirements may differ from utility to utility.
  • Once your application has been approved, an energy audit conducted by the utility or a contractor will calculate where efficiency savings can be achieved in your operation, how much you can expect to save and what rebates may be applicable.
  • Loan amounts through the SDG&E program range from as little as $5,000 to up to $100,000 for businesses and $250,000 for taxpayer-funded organizations.
  • The loan repayment period will be based on the equipment’s cost and estimated energy savings to ensure that the cost savings offset the monthly loan installment. At SDG&E, the terms range from three to five years for businesses and up to 10 years for public sector customers.

With businesses seeking savings everywhere they can, teaming up with your utility on programs such as these is a smart move.

Photo Credit:

Ted M. Reguly is the Director of Customer Programs & Assistance at San Diego Gas & Electric (SDG&E) and previously served as Director of the Smart Meter and Home Area Network initiatives for the utility.  He oversees SDG&E’s energy efficiency, demand response and customer assistance programs. He is an active member of UtilityAMI, OpenAMI and the ZigBee Alliance, and also serves on the board of directions for the utility technology association, Utilimetrics.

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