On-Bill Financing: Energy Efficiency Upgrades With No Upfront Cost
Updated: Oct 5, 2020
It is no secret that energy-efficient buildings lower operating costs. Despite knowing this, sometimes the expense of upgrading your building is too much to even consider making changes. This is why we are excited to share with you that energy suppliers offer on-bill financing (also known as on-bill repayment programs) to remove the upfront costs associated with upgrading your building’s energy systems.
What is On-Bill Financing?
Energy suppliers, like Constellation’s Efficiency Made Easy (EME) program, offer to pay for your building’s energy improvements upfront. In return, the energy supplier adds the costs to your utility bill over time. Payment periods can be up to 60 months, so the expense often adds marginal fees to your utility bills.
What Are the Advantages?
The biggest advantage of on-bill financing programs, like EME, is that you can delay the start of payments for up to 24 months. This effectively means you gain the immediate benefits of energy improvements without the burden of added expenses.
As a bonus, on-bill financing is considered off-balance sheet. Off-balance sheet items will not impact your borrowing limit. As a result, you can close much faster than going through a traditional lender.
The Bottom Line
On-bill financing allows you to reap the benefits of energy efficiency without a large upfront cost. With more cash in your pocket, you can focus your attention on further improving your bottom line. Over time, the decreased energy costs will lead to significant long-term savings.
Energy doesn’t have to be complicated. At MD Energy Advisors, we are committed to empowering people and businesses to make informed decisions about energy. We help you navigate on-bill financing and negotiate the best energy contracts possible. If you have any questions regarding energy solutions, contact to us at 410-779-9644. Our team at MD Energy Advisors is here to help.
To learn more about how we use on-bill financing to help our clients, read about our case study with JMS Capital Group Real Estate here.
MD Energy Advisors demystifies energy through education, and can help commercial real estate clients increase asset value by anticipating and solving their energy problems. Learn more at www.mdenergyadvisors.com or call us at 410.779.9644.