On-Bill Recovery Financing Program Enables Payment of Loans for Energy Efficiency Upgrades Through Monthly Utility Bills
December 13, 2012
The New York State Energy Research and Development Authority (NYSERDA) announced today that small businesses and not-for-profits in New York State that make energy-efficiency upgrades in their buildings can obtain up to $50,000 in low-interest energy efficiency financing, repayable on their monthly utility bills.
The program, known as On-Bill Recovery Financing, was a signature part of Governor Cuomo's Power NY Act of 2011.
All lenders, credit unions, and community development financial institutions across the state have an opportunity to work with NYSERDA to offer On-Bill Recovery Financing loans for small businesses and not-for-profits. Current participating lenders include: Bank of Greene County, Barrett Capital Corporation, Chautauqua Opportunities for Development Inc., Community Loan Fund of the Capital Region Inc., Pathstone Enterprise Center Inc. and SEFCU.
The On-Bill Recovery Financing Program is designed to help small businesses and not-for-profits access upfront capital to improve their energy-efficiency and lower their energy bills. The program, administered by NYSERDA, makes it possible for small businesses and not-for-profits to use the savings on their energy bills to pay for their energy efficiency upgrades.
The interest rate for this On-Bill Recovery Financing loan is currently 2.5 percent.
Francis J. Murray Jr., President and CEO, NYSERDA, said, “We have already seen in the rollout of On-Bill Recovery Financing for homeowners that New Yorkers find this to be an attractive way to pay for energy efficiency improvements. Under Governor Cuomo’s leadership, the extension of the program to small businesses and not-for-profits is expected to help spur energy efficiency projects across the state that protect our environment and reduce our reliance on fossil fuel.”
Small businesses with 100 employees or fewer and not-for-profit organizations that own their building are eligible to apply for On-Bill Recovery Financing. Also, those that lease or manage all or part of the building and have a release from the building owner to seek financing through the program are eligible. In addition, small business and not-for-profit customers must have an account with one of the following utilities to obtain On-Bill Recovery Financing: Central Hudson Gas and Electric, Con Edison, Long Island Power Authority, New York State Electric and Gas Corporation, National Grid (upstate NY customers only), Orange and Rockland, and Rochester Gas and Electric Corporation.
Small business and not-for-profit organizations may use On-Bill Recovery Financing loans to finance energy efficiency improvements identified in a qualified energy assessment provided by a NYSERDA program, a utility program or by a qualified energy consultant. These improvements can include upgrades to the organization’s lighting system; system and building controls; heating, ventilation and air conditioning (HVAC) systems; commercial kitchen equipment; business processes and other systems. Some energy efficiency projects may also qualify for NYSERDA or utility incentives or rebates. To be eligible for the On-Bill Recovery Financing program, the annual energy savings from an energy project must be greater than estimated annual loan payments, and the project must be able to pay for itself within 15 years or less.
Applicants must meet NYSERDA’s loan underwriting criteria, which include but are not limited to:
- Organizations must be at least two years old;
- Small business principals need a credit score of 650 or higher;
- No bankruptcies within the last 5 years;
- No current judgments or liens in excess of $5,000;
- Debt service coverage ratio > 1.2.
Funding for On-Bill Recovery Financing is made available through Green Jobs - Green New York, which provides funding for energy assessments, low-cost financing for energy upgrades, and technical and financial support to develop a clean energy workforce.
The application for On-Bill Recovery Financing for small businesses and not-for-profits, and contact information for participating lenders are available at On-Bill Recovery Loan - How to Apply. The application for lender participation is at www.nyserda.ny.gov/loan-originator-agreement [PDF].
Last Updated: 11/26/2014