Across the country, 42 million people are served by rural electric cooperatives. These co-ops are an integral part of America’s rural communities, with nearly 850 distribution co-ops and 65 generation and transmission co-ops providing electricity across 47 states. Electric co-ops reach 12 percent of the nation’s population, while delivering 10 percent of the total kilowatt-hours sold in the U.S. each year.
Rural households face a disproportionally high energy burden, paying 40 percent more for energy than urban households, according to an American Council for an Energy-Efficient Economy report. Many electric co-ops are working to bring energy saving solutions to their members, but often face resource challenges. To help overcome this barrier, the U.S. Department of Agriculture (USDA) established the Rural Electric Savings Program (RESP). RESP helps rural families and small businesses achieve cost savings by providing loans to qualified consumers to implement durable cost-effective energy efficiency measures. RESP funds—$100 million available in the current year—may be used for the purpose of implementing energy efficiency measures to decrease energy use or costs for rural families and small business. Learn how to apply here!
The primary purpose of RESP funds is to lend capital to rural utilities to create “on-bill financing” programs for their member-customers. On-bill financing helps homeowners and renters access home improvements that lower their energy bills and increase home comfort. The no-money-down approach (coupled with appropriate protections) is especially important for economically vulnerable families, who can benefit greatly from lower energy bills but lack the savings to take advantage of energy efficiency rebate programs. Local communities benefit through increased economic activity in the service area and region, including job and wealth creation. On-bill financing programs are a boon to home contractors and energy auditors, which in turn supports the entire supply chain of energy efficiency materials.
Electric co-ops that run on-bill financing programs can benefit in various ways, including reduced per capita energy use and peak load shaving, which can help avoid the need for new power generation facilities and help meet energy reduction goals. These programs have also been shown to increase member satisfaction with their co-op.
At least 75 electric co-ops in 23 states have residential on-bill financing programs. These programs vary widely in structure and goals—some are simply heat pump replacement programs with no energy savings goal. Early adopters like Butler Rural Electric Cooperative in Ohio and the North Arkansas Electric Cooperative have shown the viability of the general approach since the 1980s. Over the past decade, co-ops throughout the Southeast have successfully introduced program design innovations. These exciting changes have evolved the on-bill financing model to be more inclusive, delivering deeper energy savings to member-customers of all income levels.
These exciting changes have evolved the on-bill financing model to be more inclusive, delivering deeper energy savings to member-customers of all income levels.
How EESI Can Help
The Environmental and Energy Study Institute (EESI) recently launched the Access Clean Energy Savings (ACES) program to work with electric co-ops and their partners to establish member-focused financing programs that reduce total energy costs. EESI can also assist rural utilities with applications to RESP to capitalize their projects. The ACES program builds off EESI’s decade of experience providing technical assistance to rural electric co-ops for on-bill financing programs. EESI offers this assistance in collaboration with NCBA CLUSA as part of the Partnership for Advancing an Inclusive Rural Energy Economy. EESI’s work is grant-funded; its program-related assistance is available for free to electric co-ops and related stakeholders.
EESI has been providing no-cost assistance to rural electric co-ops to access clean energy savings since 2010. Learn how you can benefit from EESI assistance here and read about the RESP loan application process here.