Energy efficiency upgrades often stall for one simple reason: capital.
Plant managers and facility teams can clearly see the operational benefits of upgrades like LED lighting and advanced lighting controls. But even strong projects often compete with production equipment, repairs, and other capital priorities.
In many parts of the U.S., local utilities have begun offering financing programs designed to help businesses move forward with these upgrades without large upfront investment. These utility-sponsored financing programs often reduce financing costs to 0% or below-market rates when projects meet certain energy savings criteria.
Some programs go a step further. On-Bill Financing (OBF) and On-Bill Repayment (OBR) programs allow upgrades to be repaid directly through the facility’s electric bill, eliminating the need for a separate lender payment and simplifying internal approvals.
For facilities facing capital constraints but looking to modernize lighting, improve energy performance, or reduce maintenance burden, these programs can make projects significantly easier to implement.
Below, we break down the top utility-sponsored financing programs available to commercial and industrial facilities across the U.S., and clearly identify which options offer true on-bill repayment versus traditional financing supported by utility incentives.
Utility-Sponsored Financing vs. On-Bill Financing
Utilities support energy upgrades because reducing energy demand is often more cost-effective than expanding generation or upgrading infrastructure. These programs are most common in regions where energy costs are higher and energy efficiency adoption is a major priority.
In practice, utility-sponsored financing typically falls into two buckets.
On-Bill Financing or On-Bill Repayment (OBF / OBR)
With on-bill programs, the repayment for the project is collected directly through the facility’s electric utility bill over a defined term.
For many organizations, this structure can simplify internal approvals because there is no separate third-party lender payment to manage. Finance continues paying the utility bill as usual, with the upgrade repayment included as part of that billing structure.
Operationally, this can make projects easier to approve because:
- There is no separate loan payment or lender relationship
- Repayment is handled through the existing utility billing process
- Many programs offer 0% financing
For projects like LED lighting upgrades, the savings can be significant. Lighting retrofits often reduce lighting energy consumption by 50–70%, meaning a portion of the reduced energy spend can help offset the financing payment during the term.
Once the financing period ends — often within 3–5 years — the full energy savings remain with the business.
Utility-Sponsored Financing (Off-Bill)
Some utility programs provide financial support but do not collect repayment through the electric bill.
Instead, the utility sponsorship typically appears in the form of:
- Interest rates reduced to 0% or below market rate
- Financing eligibility tied to utility incentives or energy savings thresholds
These programs are still extremely valuable for companies with capital constraints. They reduce the cost of financing energy upgrades even though repayment occurs through a separate line item, rather than directly on the utility bill.
Across both categories, the most common qualifying projects include:
- LED lighting upgrades
- Advanced lighting controls
- Other energy efficiency improvements that meet utility savings requirements
In the sections below, we break down the most relevant programs by region and clearly indicate which ones are true on-bill programs and which ones are utility-sponsored financing options.
Why This Can Be Easier Than Traditional Financing
For many facilities, the biggest friction isn’t the project. It’s the approval process.
Utility-sponsored programs can help because they reduce or remove common blockers:
- Lower cost of capital (often 0% for qualifying projects)
- Less upfront cash required
- Clear, program-driven structure tied to utility goals
And for true on-bill programs (OBF/OBR), there’s a second layer of simplification:
- Repayment is collected through the utility bill, rather than a separate lender payment
The big idea for each of these programs is that monthly energy savings will offset repayment costs over time. The specifics depend on the project, the utility program, and the measure requirements.
Example Scenario
Say your monthly utility bill is $10,000.
Your facility was recently impacted by a ban on fluorescent lighting. You are looking to retrofit all of your lights to LED to get into compliance and save time for your maintenance team.
Finance doesn’t want to allocate the cash to outright pay for the project, nor do they want to take on a loan to finance the project.
Good news — your utility offers an On-Bill Financing program, so both of those issues are avoided:
- Your new lighting gets installed. You pay $0 upfront.
- Your future utility bills stay at that same $10,000 per month. Nothing changes. It may even be less than $10,000.
- However, now instead of your entire $10,000 payment going towards energy spend, only $3,000 goes toward energy spend, and $7,000 goes to paying off your upgrade.
- Jump to year 4. Your upgrade is fully paid off. And that $7,000 payment you were making is now free cashflow for your business.
- Compliance issues are fixed. Maintenance never has to worry about the lights. And best of all — your facility looks incredible from the new lighting.
On-Bill Financing Programs by Region
The following programs allow energy upgrades to be repaid directly through the utility bill. These are true On-Bill Financing (OBF) or On-Bill Repayment (OBR) programs.
Because repayment is collected through the electric bill, many organizations find these programs easier to approve internally. Finance continues paying the same utility provider, and there is no separate third-party lender payment to manage.
Terms, caps, and eligibility requirements vary by utility.
California
California has one of the most developed on-bill financing landscapes in the country.
Pacific Gas & Electric (PG&E) – On-Bill Financing (OBF)
Key features:
- Up to $400,000 per site
- 0% financing
- Maximum 10-year payback
- Projects must achieve at least 5% energy savings relative to total meter usage
- Credit screening required
For larger facilities, the per-site cap and savings threshold are important considerations during project design.
Learn more: Download the PG&E OBF flyer
Southern California Edison (SCE) – On-Bill Financing (OBF)
Key features:
- 0% financing
- $250,000 limit
- Multi-meter projects eligible up to $1M
- Terms allowed up to 10 years or the expected useful life of the measure
- Requires participation in a measurement and verification incentive pathway
For qualifying projects, this can provide a direct 0% financing route without requiring a separate loan structure.
Learn more from the SCE website: https://www.sce.com/business/rates-financing/energy-efficiency-financing/on-bill-financing
San Diego Gas & Electric (SDG&E) – On-Bill Financing (OBF)
Available for projects that qualify under SDG&E’s GRID-MAP incentive pathway.
Key features:
- Requires participation in the GRID-MAP M&V incentive
- Commercial customers: $100,000 per meter (capped at $1M), 3-year maximum payback for lighting
- Government-funded customers: $250,000 per meter (capped at $2M), 15-year maximum payback for lighting
- Eligible California state accounts: $1,000,000 per meter (capped at $2M), 15-year maximum payback
Payback limits and per-meter caps are critical when evaluating scope.
Learn more from the SDGE website: https://www.sdge.com/0-interest-loans-qualifying-businesses
New Jersey
New Jersey utilities offer strong 0% on-bill repayment structures, typically paired with utility incentives.
PSE&G New Jersey On-Bill Repayment (OBR)
Key features:
- 0% financing
- Repayment added to the utility bill over 60 months
- Must be paired with a utility incentive
- No maximum financed amount
- Incentive approval timelines can exceed four months
- For larger facilities, the absence of a funding cap can be significant.
Learn more: download the PSE&G OBR flyer
Jersey Central Power & Lighting (JCP&L)
Key features:
- 0% financing for projects under $250,000
- For projects above $250,000, 0% financing available for 80% of project cost (blended rate structure)
- 3-year and 5-year terms
- Must be paired with a utility incentive
- On-bill repayment available
Learn more from the JCP&L website: https://www.firstenergycorp.com/save_energy/save_energy_new_jersey/financing-options.html
Utility-Sponsored Financing Programs by Region
The following programs are also utility-sponsored, but repayment is not collected through the utility bill.
Instead, utilities support these projects by reducing financing costs. In many cases, this means interest rates reduced to 0% or below market rates when paired with eligible energy efficiency projects.
These programs are still excellent options for facilities looking to implement upgrades without paying upfront capital.
California
Go Green Financing (California)
Go Green is a statewide program available to customers of:
- PG&E
- Southern California Edison
- San Diego Gas & Electric
Key features:
- Financing available up to $5 million
- Below-market interest rates, depending on term length
- Structured options available to reduce effective rates to 0%
- On-bill repayment option available depending on utility territory
- Does not require utility engineering pre-approval before financing is established
Note: SCE customers using Community Choice Aggregation (CCA) are eligible for Go Green, but they cannot do on-bill repayment.
Learn more from the Go Green website: https://www.gogreenfinancing.com/energy-efficiency-business-loans-california/
New Jersey
Atlantic City Electric
Key features:
- 0% financing under $250,000
- For projects above $250,000, 0% financing available for 80% of project cost
- 1–5 year terms
- Must be paired with a utility incentive
Learn more: download the Atlantic City Electric flyer
Rockland Electric
Key features:
- Utility sponsored financing through NEIF
- 0% financing available for 80% of project cost over $250,000
- 1–5 year terms
- Must be paired with a utility incentive
Learn more: download the Rockland Electric flyer
Northeast
Energize Connecticut (Eversource/UI)
Key features:
- Utility-sponsored financing through NEIF
- 2.99% (non-comprehensive/single measure project) rates up to $100,000; below-market rate financing for projects above $100,000. Max 60 months.
- Must be paired with incentive
- 0% financing available for Small Business customers, up to $100,000, max 60 months. On Bill Repayment available with this option.
Learn more: download the Eversource flyer
Mass Save: Commercial & Industrial Financing (National Grid/Eversource)
Key features:
- Utility sponsored financing through NEIF
- 2.99% financing up to $100,000 (after incentives) for single-measure projects
- Below-market rates above $100,000
- Must be paired with a utility incentive
- As of 2026, program limited to controls-only measures
- 0% financing available for Small Business customers up to $100,000 (max 48 months)
The controls-only limitation is important when scoping projects in Massachusetts.
Learn more: download the Eversource flyer
NH Saves (Eversource)
Key features:
- Utility sponsored financing through NEIF
- 2.99% financing up to $100,000 for single-measure projects
- Below-market rates above $100,000
- Must be paired with a utility incentive
- 0% financing available for Small Business customers up to $100,000 (max 48 months)
Learn more: download the NH Saves flyer
Michigan
Michigan Saves (DTE & Consumers Energy)
Key features:
- 0% financing for 36 months up to $250,000
- Must be paired with a utility incentive
- Projects above $250,000 financed at market rate (resulting in blended structure)
- Projects with very high savings or significant utility benefit may qualify for extended 0% consideration
In Michigan, the level of energy savings and associated incentive plays a significant role in financing eligibility.
Learn more from the DTE Energy website: https://www.dteenergy.com/us/en/business/energy-efficiency/getting-started/find-financing.html
Case Study: Nutrien Ag Solutions
PEC worked with Nutrien Ag Solutions to leverage On-Bill Financing across 10 retail sites in California — cutting energy waste by nearly 70%.
Navigating Eligibility the Right Way with PEC
On-bill financing can be one of the most effective tools for advancing energy upgrades without drawing from capital budgets. But eligibility thresholds, savings requirements, incentive pairing, caps, and term limits vary significantly by utility and region.
PEC has an in-house team of Energy Program specialists whose full-time focus is navigating these utility programs. Their role is to evaluate eligibility early, structure projects correctly, and help ensure the financing pathway aligns with both utility requirements and your operational goals.
If you are evaluating an upgrade and want to understand whether on-bill financing is available in your region, connect with the PEC team to review your project and utility territory.
