How to use On-Bill Financing to pay for energy efficient and renewable energy projects

On-Bill Financing to pay for energy projects

Education is central to our mission at Pathway Lending. That’s why we’ve written this 8-part blog series to cover all the different ways to pay for energy and water efficiency projects.

Today’s article is a brief introduction to On-Bill Financing and On-Bill Repayment – two more ways to finance your energy efficiency upgrades.

On-Bill Financing (OBF) or On-Bill Repayment (OBR) are financing options where a private lender or utility provider supplies funds to a customer to implement energy efficiency projects. The loan is repaid through regular installments on an existing utility bill.

Please note that these on-bill options are only available in places where the utilities provider supports this financing mechanism. Click here for a map of areas where on-bill financing is currently offered. No commercial on-bill financing programs are currently offered in the Tennessee Valley Authority region. You’ll need to contact your utilities provider to see if they support OBF of OBR financing for energy projects.

How does On-Bill Financing work?

Through on-bill financing, the borrower owns the equipment and can receive tax benefits of the ownership. The equipment adds value to a real estate asset, but the loan can be structured in a way so that it is not a liability on the balance sheet.

On-Bill Financing is often tied to a meter rather than a specific borrower. This has several benefits. First, an end user can plan to pass the financing costs onto the next account holder of the meter when the property is sold or when a lease ends. Second, lessees are more apt to implement energy efficiency projects because the financing can be passed to the next account holder, and no real estate collateral is required by the loan.

Click here to learn more about On-Bill Financing and On-Bill Repayment and the difference between the two methods on the Better Building Solutions page of

While Pathway Lending does not assist end users or vendors with on-bill financing projects, we do offer a below market rate of 2% on commercial loans through our Energy Efficiency Loan Program. Click here to learn more or contact me to talk about your project.

Energy Blog post by Brandon EnglandBrandon England
Director – Energy Efficiency
(615) 425-7192


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