California Businesses Get 0% Financing for Efficiency Improvements

There’s some good news for business owners in California. PG&E one of the country’s largest natural gas and electric utilities has allocated $20 million for On-Bill Financing (OBF) loans to customers from Eureka in the north to Bakersfield in the south, and from the Pacific Ocean in the west to the Sierra Nevada in the east. The program’s been around for a while but it is underutilized, so this is a call to action.

What exactly is OBF? It is a new, easy (application is said to be a snap) way for business owners to finance energy efficiency improvements. Through OBF a utility company allows qualified commercial customers to pay for energy-efficient business improvements through an interest-free (aka. 0% financing) loan on their monthly bill. The energy savings are used to offset the loan, so the monthly expenses are lower than taking a conventional loan and may be completely offset by energy savings. When the loan is paid off, the utility bill stays lower permanently.

OBF is a no-brainer if you want to upgrade some of your infrastructure to become more energy efficient but don’t want to shell out the cash. According to SB-California, a leading edge small business organization, the typical California small business energy efficiency programs average about $1000 per installation with around $200 of small business owner investment, but translates into thousands instead of hundreds of dollars saved per business per year.

As Scott Hauge, President of SB-Cal told me told me when I was researching my book:

You’re basically paying the [loan] back with your energy savings. It’s a pretty well-accepted statement that small businesses waste about 30% of their energy use. They waste 30% because they don’t know what to do to resolve the problem. But with encouragement from government and governmental policies, small business would, I believe with very little effort, reduce their energy use significantly.

Today OBF is only available in limited parts of the country. But now that PG&E is on board, almost every business owner in California has access to OBF. And if you’re not operating in sunny California? Parts of Connecticut, Rhode Island, and Massachusetts have OBF—and programs are under serious consideration in New York, Pennsylvania, Nevada, Wisconsin, and Oregon.  Small business organizations are lobbying aggressively to make it available throughout the country. So check with your utility company.

Information about the PG&E program is available by calling (800) 468-4743.

Photo: Piotr Bizior at

About the Author

Jennifer Kaplan writes regularly about sustainable food and wine, the intersection of food and marketing and food politics for and is the author of Greening Your Small Business (November 2009, Penguin Group (USA)). She was been named one of The 16 Women You Must Follow on Twitter for Green Business. She has four kids, a dog, a hamster and an MBA - find her on .