On-Bill Financing/Repayment (OBF/OBR)
On-bill financing mechanisms are repaid on the customer’s utility bill and are often secured by the right to shut-off a customer’s power if the financing charges go unpaid.
On-bill mechanisms have various capital sources: non-utility private capital is called on-bill repayment (OBR), or public sector or utility capital, called on-bill financing (OBF). Sources may include: utility systems benefits charge, funds from a city or state treasury, an institutional lender, or an investor ready to purchase the loans.
OBR/OBF program success is contingent on collaboration between a state or city and a local utility that has strong incentives to invest in efficiency. An on-bill program is only realistic with the cooperation of a utility and the utility regulator, even if loans are funded by external sources via OBR.