Sanders Announces $1M for On-Bill Financing of Small Business Energy Efficiency Projects

At a news conference in Burlington, VT, Sen. Bernie Sanders (I-VT) announced that a $1 million federal grant will help the Burlington Electric Department provide On-Bill Financing to small business customers for energy efficiency projects, including geothermal heat pump installations.

Sen. Sanders provided details of the new pilot program at a news conference with Burlington Mayor Miro Weinberger and Public Service Commissioner Elizabeth Miller.

According to news reports, Burlington’s proposed On-Bill Financing targets outdated and inefficient lighting, refrigeration and heating and air conditioning systems. Those “loads” drive the city’s summer peak consumption of electricity.

Geothermal heat pumps are the most efficient replacement for outdated heating and air conditioning equipment.

The idea of On-Bill Financing was offered by Geothermal Exchange Organization (GEO) Doug Dougherty following testimony to the Senate Energy and Natural Resources Committee in June 2011 for another bill. He noted On-Bill Financing as a way to help reduce the upfront cost of geothermal heat pump installations.

Dougherty subsequently met with Sen. Sanders to further discuss the concept, which led to a hearing specific to the issue where GEO Board Member Phil Schoen (Geo Enterprises – Tulsa, OK) testified on its behalf.

GEO strongly supported Sanders’ provision for an On-Bill Financing pilot program for small business until it was passed as an amendment to the Consolidated Appropriations Act of 2012 (H.R. 2055). President Barack Obama signed the bill into law on Dec. 23, 2011.

The Sanders amendment directs the Economic Development Administration (EDA) to use $1 million of its existing funds to support On-Bill Financing programs for small businesses. As part of the U.S. Department of Commerce, EDA awarded the grant to the Burlington Electric Department.

On-Bill Financing is a utility-run program that offers upfront funds to small businesses to make improvements that save energy and lower bills, Sanders said. It has great potential to address the upfront cost barrier to geothermal heat pump installations.

By financing geothermal heat pump installations with payments on monthly utility statements, installation costs are converted into small monthly payments that are more than offset by the monthly energy savings realized by such projects.

And since defaults on such loans are less than 2%, the pilot program essentially leverages the $1 million offered by EDA into $50 million worth of energy efficiency installations.

Sanders’ pilot On-Bill Financing program could take effect in early 2013, and will help reduce waste of electricity. Many of the energy efficiency measures installed under the new program could be paid back within four years, he added. Energy savings would then directly benefit a business’ bottom line.

“GEO congratulates Sen. Sanders and the Burlington Electric Department for their vision in setting forth this ground-breaking pilot program for On-Bill Financing,” said Dougherty. “Geothermal heat pumps can play a significant role in fulfilling the energy savings goals of the new program.”

The pilot program in Vermont has the potential to expand beyond approximately its initial participants to more business owners — and ultimately to benefit homeowners. Sanders said he has “more comprehensive” legislation in the works that will extend the benefits of on-bill financing to more Americans.

Ted Clutter
Communications and Outreach
GEO – The Geothermal Exchange Organization
Phone (509) 758-2289 | Email