Hummel quoted on Arkansas cooperative's novel efficiency financing
Ouachita has embraced an energy efficiency financing method known as Pay As You Save (PAYS), which uses an innovative method to fund retrofits. Rather than loan the money to pay for an improvement, and saddle the customer with debt, the PAYS method uses an on-bill tariff that is tied to the the home's meter. There are some specific metrics that must be present, including payoff length and whether a member co-pay is needed, but the end result is instant on-bill savings for the customer and decreased load for the cooperative.
Holmes Hummel, founder of Clean Energy Works, an organization that advocates for this type of financing, said there is growing interest and in the model and both cooperative and for-profit utilities in several states are considering adopting the practice. And they are looking at ways to broaden its reach beyond efficiency.
"The front-running utilities in the field are expanding their inclusive financing programs for energy efficiency to support more applications that create value with demand response," Hummel said. Those new investments could include smart thermostats, water heater switches and even the possibility for on-site storage.