Tariffed On-Bill Pilot

What is the TECH Tariffed On-Bill Pilot?

TECH’s Tariffed On-Bill Pilot can help your utility or CCA achieve its carbon and climate goals while enhancing customer service.  

Decarbonizing our buildings will require unprecedented investment. Rebates alone will not be enough to get California to decarbonized buildings by 2045, especially because over 40% of California households face financial barriers to electrifying their home—either because of their credit score, income, or because they rent. Tariffed On-Bill financing is a proven, scalable model that can overcome these barriers. 

TECH will provide a partner utility or CCA with technical assistance and ongoing support, including up to $3 million for risk management, to support design and launch of a pilot TOB program. Read more below to find out how to participate.

What is Tariffed On-Bill Investment?

Tariffed On-Bill (TOB) is a proven, scalable model used to accelerate customer adoption of energy and water efficiency measures in utility programs operating across the county. TOB enables utilities and their customers to make site-specific investments for efficiency and other building improvements, using utility authority to recover costs through customer on-bill payments established and enforced through utility-approved tariffed terms.

Workshops and Other Learning Opportunities

The TECH team is hosting a series for utility and other interested stakeholders to learn more about Tariffed On-Bill and TECH pilot opportunities. This section will be updated with any upcoming events and registration links.

  • Opening Informational Workshop: This introductory webinar—presented by the TECH Innovative Finance Team on Sep. 16, 2021—provides background on TOB and information on pilot activities. Download presentation slides and view a recording of this webinar using the links in the “Additional Links & Resources” sidebar.
  • Working Sessions: The TECH team is hosting a series of working sessions with interested utility and CCA staff to investigate specific TOB topic areas that will be important to designing and implementing any TOB pilot, including but not limited to tariff terms, utility/CCA authorities, customer economics and protections, and billing system requirements.

If you’re interested in joining these working sessions or looking for more information, please email TECH.Pilots@energy-solution.com.

Frequently Asked Questions

Why are Tariffed On-Bill (TOB) investments needed?

Decarbonization of an existing home requires a substantial capital investment. While financial incentives are helpful in lowering upfront investment costs, customers still need access to capital to fund the balance. Tariffed On-Bill investments expand customer access to capital to include those customers that are typically disqualified due to high debt-to-income ratios, poor credit, low home equity, or renter status.

According to the Building Decarbonization Coalition, California is home to more than 4 million low-income households and more than 5.8 million households in rental housing, including 2 million moderate- and above moderate-income renter households. Taken together, approximately 6 million households, or more than 40 percent of all California households, lack ready access to private capital for upgrading their homes.

How do Tariffed On-Bill investments work?

A tariffed on-bill program allows a utility to pay for cost-effective energy improvements at a specific residence, such as home heating and cooling units, and to recover its costs for those improvements over time through a dedicated charge on the utility bill that is immediately less than the estimated savings from the improvements.

How are Tariffed On-Bill investments different from on-bill financing programs?

The tariffed on-bill model differs from on-bill loans and repayment models in that tariffs are not a loan, but rather a utility investment for which cost recovery is tied to the utility meter according to terms set forth in a utility tariff. The tariff charge remains attached to the meter at the improved home, regardless of who occupies the property, until utility cost recovery is complete. This investment model thus enables the sponsoring utility to offer nearly universal access to capital to its customers, including those customers that are typically disqualified due to high debt-to-income ratios, poor credit, low home equity, or renter status.

How are consumers protected?

At a minimum, utility investments behind the customer meter will be required to deliver cash-positive benefits to the occupants; that is, the value of the expected energy savings must exceed the cost recovery charge. Additional protections are being contemplated.

What are the landlord’s responsibilities in a TOB project?

Landlords have a fiduciary duty to provide space heating and hot water for their tenants. To prevent the cost of equipment upgrades from getting shifted to tenants, landlords will be required to contribute the like-for-like replacement costs for space heating and hot water upgrades. Tariffed investments can cover the incremental costs to upgrade to clean electric technologies.

Where have Tariffed On-Bill investments been implemented before?

Over the past twenty years, 18 public and private utilities in Hawaii, New Hampshire, Arkansas, Kentucky, and North Carolina have invested more than $40 million to upgrade thousands of homes, mostly using the Pay As You Save® program model. Case studies for programs in Arkansas, Kentucky, North Carolina, and Tennessee are provided by the Southeast Energy Efficiency Alliance (SEEA).

What is the purpose of the TECH Tariffed On-Bill Pilot?

The Energy Solutions team will demonstrate and expand the Tariffed On-Bill (TOB) investment model through a pilot in partnership with a willing and able Load Serving Entity (LSE). The intent of the pilot is to expand customer access to capital to include those customers that are typically disqualified due to high debt-to-income ratios, poor credit, low home equity, or renter status.

Who is eligible to partner with the TECH Initiative on the Pilot?

Viable LSE partners include Investor-owned Utilities (IOUs), Publicly-owned Utilities (POUs), electric cooperatives, water districts, and Community Choice Aggregators (CCAs), as long as their customers receive gas service from an IOU (i.e., Pacific Gas & Electric Co., Southern California Gas Co., San Diego Gas & Electric Co., Southwest Gas Co.).

What is the Pilot’s timeline?

Work will be phased according to the following timeline:

    • Pre-planning: Model program design, Q3 and Q4, 2021
    • Phase 1: Partner recruitment, Q3 and Q4, 2021
    • Phase 2: Detailed program planning with committed utility partner, 2022
    • Phase 3: Program launch and implementation, 2023

Which customers are eligible to participate in the Pilot?

While the Pilot’s intent is to expand customer access to capital to include those residential customers that are typically disqualified due to high debt-to-income ratios, poor credit, low home equity, or renter status, there is no reason to limit program eligibility to these segments. Eligibility can extend to all residential customers within the partner LSE’s service territory.

What kinds of projects are eligible?

Eligible TECH Pilot projects must include the installation of heat pump space conditioning and/or heat pump water heating equipment. Other clean energy technologies may also be eligible for installation through the pilot, subject to partner LSE approval.

How can TECH help a utility pilot TOB?

For a California utility interested in working with TECH to design and implement a TOB Pilot, the TECH team can offer significant support, including:

In-kind technical assistance for program design & pilot launch

    • TECH expertise with multiple financing and TOB initiatives in CA and nationwide
    • Deep understanding of and experience: utility rates and tariffs; disclosure processes and customer notifications; billing and financial accounting and data flow
    • Program design informed by analysis of customer gas & electric data

Implementation support, as needed

    • Contractor recruitment & training
    • Meter-based customer targeting
    • Project feasibility analysis, cost recovery calculations, QA/QC practices

Risk management

    • Up to $3M for risk mitigations (assuming $5M capital investment)
    • Program M&V & supporting risk management analytics

Additional Links & Resources

Model TOB Program Plan Final

Jan. 6 2022
Stakeholder Working Group, Workshop #7:
Download Slides

Dec. 16, 2021
Stakeholder Working Group, Workshop #6:
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Dec. 2, 2021
Stakeholder Working Group, Workshop #5:
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Nov. 18, 2021
Stakeholder Working Group, Workshop #4:
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Nov. 4, 2021
Stakeholder Working Group, Workshop #3:
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Oct. 7, 2021
Stakeholder Working Group, Workshop #2:
Donwload Slides

Sep. 23, 2021
Stakeholder Working Group, Workshop #1:
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Sep. 16, 2021
Tariffed On-Bill Informational Workshop: