As more and more distributed resources come onto the grid, we are coming full circle back to something that looks more like Edison’s original distributed energy system, after a century of Samuel Insull’s centralized model. Besides changes in how energy is generated, the way it is used is also changing, with energy customers becoming active participants rather than just passive consumers. The interoperability of all of the devices on the grid is essential to keeping up with the changing needs of customers and energy markets.
Energy efficiency improvements can be expensive and burdensome for residential homeowners, renters and building owners. Luckily, there are an increasing number of financial options to help cover the up-front costs of efficiency upgrades. Below, we lay out several financing options to make our homes and workplaces more energy efficient.
1. On-Bill Financing
On-bill financing is an umbrella term for a financing program where a charge is added to a customer’s energy bill to repay a loan from a utility for energy efficiency upgrades. The utility acts as the lender and incurs the upfront costs of the improvements.
How It Works
Cost-effectiveness testing is an important part of energy efficiency planning, reporting and evaluation. Utilities use cost-effectiveness tests to demonstrate that their investments in energy efficiency are in the best interests of the utility, their customers and society in general. The traditional tests come from a California Public Utility Commission manual that was developed in the early 1980s and last updated in 2001.
On May 4, Iowa Governor Kim Reynolds signed Senate File 2311(SF 2311) into law, which will make significant changes to the way utilities drive customer energy savings programs within the state. Most notably, the bill caps utility investments in energy efficiency and created a broad opt-out provision for all customers.
Last week the Iowa House Commerce Committee passed Senate File 2311, a bill that will significantly alter the way utilities drive customer energy savings programs in Iowa. The bill has already passed the Senate and is now eligible to go to a debate on the House floor.
To most outsiders, the world of energy efficiency probably appears static with slow, incremental changes. A furnace rebate here, light bulb swap-out there, maybe an updated building energy code every few years. But it should come as no surprise to industry insiders that this isn’t the case at all. An explosion of new technology across every part of our economy is rapidly changing our energy savings goals and the ways we identify and capture those savings.
The average Midwesterner pays 65% more for electricity than they did at the turn of the millennium. Saving energy is a key way to help lower customer bills even with rising rates. Utility Consumer Advocates (UCAs) represent residential customers before regulators and legislatures, and they use their expertise to help ensure ratepayer dollars are spent prudently and cost-effectively.
As a membership organization that includes utilities, businesses, advocates and government agencies, MEEA knows the power of collaboration. Time and again, we’ve seen first-hand that when diverse groups sit down at the table together, we’re able to harness our collective expertise and experience to find solutions that work for everyone.
And we’re not the only ones who think collaboration is a powerful tool. Several states in the Midwest currently convene collaborative groups to promote energy efficiency.