How PG&E Helps Unlock the Potential of Energy Efficiency

By Jonathan Marshall

In a keynote speech last month to the Consortium for Energy Efficiency, PG&E CEO Tony Earley called energy efficiency “an area where we intend to continue being a leader.”

PG&E, along with other California utilities, is in the forefront of creative efforts overcome hidden financing barriers that discourage many customers from making sensible investments in energy-efficient technology that could save them money and benefit the environment. Even when those investments could pay for themselves in two or three years, customers may not have the liquidity or the access to loans to pay for projects that lower their energy bills.

The Gold Country Fair saved $17,000 in PG&E-sponsored LED exterior lighting, then received a $65,000 loan through the utility — without increasing its energy bill.

Since October 2011, PG&E has offered business and government customers interest-free loans to invest in qualifying equipment, including lighting, HVAC, electric motors, LED street lights, refrigeration, food service equipment and water pumps. Customers pay off the loans through a monthly surcharge on their energy bill, which is calculated to equal their estimated monthly energy savings.

Businesses are eligible for loans of up to $100,000 per premise, repayable, repayable over a maximum of five years. Government customers may borrow up to $250,000 per PG&E meter and have 10 years to repay.

To date, PG&E has issued 500 loans and has reserved funds for another 274 projects that are still underway. The utility has $16.7 million left to lend out of an original pot of $50.5 million.

At the suggestion of a PG&E customer relationship manager, the Gold Country Fair in Auburn took advantage of the program to install all new LED exterior lighting. It saved $17,130 in direct PG&E-sponsored rebates on the lighting, then received a loan for $65,190 through PG&E’s Energy Efficiency Financing Program to cover the rest of the cost of the project. It plans to pay the loan back in just under three years — without an increase in bills.

Fair organizer recommends energy-efficient plan

“We highly recommend this plan to other customers,” said Laurie Johnson, CEO of Gold Country Fair. “As a state agency losing state allocations in 2011, maintenance projects were forced to be deferred in our reduced budget. PG&E’s on line loan allowed the Gold Country Fair important improvements without a major financial expense. . . . PG&E made it very simple to take advantage of the program.”

PG&E plans to launch seven new pilot finance programs over the course of this year, targeting residential as well as business customers, all aimed at unlocking smart investments in energy efficiency. Some of these pilots would facilitate third-party financing of customer projects, minimizing costs to other utility customers.

In a speech last month, PG&E's Tony Earley touted the many benefits of energy-efficiency programs. (Currents Archive Photo.)

Expansion of such programs nationally, according to enthusiasts at the Environmental Defense Fund, “could boost employment job-years by over 600,000 in the next 12 years . . . help drive $87 billion in new clean energy investment, save over $590 billion from customers’ utility bills, and help to avoid 1,100 million metric tons over 12 years, or about 19 million cars off the road.”

A 2011 report by the American Council for an Energy-Efficient Economy offered a more sober assessment of on-bill financing and similar programs.

Noting that on-bill financing “is not a panacea,” ACEEE pointed out that such programs need to be “complemented with other program approaches such as technical assistance, contractor training, and cash incentives to reduce the amount of loan needed or buy down interest rates.” (PG&E offers all of these measures, by the way.)

On a more up-beat note, however, it concluded that on-bill financing “has strong potential to penetrate markets that would not have access to upfront capital for energy efficiency investments.”

To see if your business project qualifies for PG&E’s Energy Efficiency Financing Program, contact your account representative or call the PG&E Business Customer Service Center at 1-800-468-4743.

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"PG&E" refers to Pacific Gas and Electric Company, a subsidiary of PG&E Corporation.
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