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New financing program to make electrification affordable for Californians

Neighborhoods & Capitol

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Robin Tung,

New financing program to make electrification affordable for Californians
California utilities submitted a joint proposal for an innovative financing program that makes clean energy upgrades accessible for lower income Californians. 

Sacramento, CA – A joint proposal to pilot a new financing framework to expand access to clean energy upgrades and zero-emission heat pumps for renters and lower income Californians to improve their homes was presented to the California Public Utilities Commission (CPUC) yesterday by four major investor-owned utilities and one local power provider. If approved, the Inclusive Utility Investment (IUI) financing pilots will be the first of their kind for energy efficiency and building decarbonization in California, and can model how to expand affordable decarbonization for millions of Californians. This decarbonization strategy will accelerate heat pump adoption to meet the state’s six million heat pump target by 2030 and reduce greenhouse gas emissions. The clean energy upgrades can also benefit Californians by lowering energy bills through energy efficient appliances, providing cleaner indoor and outdoor air, and boosting climate resiliency during extreme heat. 

“The IUI financing model is innovative–it removes barriers for lower income and renter populations who want to make clean energy upgrades to their homes,” said Beckie Menten, Senior Regulatory & Policy Specialist at the Building Decarbonization Coalition. “We encourage the California Public Utilities Commission to swiftly adopt this program framework, expand access to safe and healthy zero-emission homes and buildings for Californians, and pave the way for large-scale decarbonization to achieve our climate targets.” 

The pilot programs proposed by Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, Southern California Gas Company, and Silicon Valley Clean Energy are based on the Inclusive Utility Investment financing model, also known as Tariffed On-Bill (TOB) financing. This mechanism provides up-front capital for electrification and energy efficiency upgrades for a property. The financing model ties a project investment to a building rather than an occupant, which expands eligibility and removes traditional barriers like credit score screenings. To recover the investment cost, utilities can utilize a tariff on monthly utility bills and spread the cost of the new upgrades over an extended time frame to keep the charge low. The way that IUI financing is designed to work keeps monthly charges lower than the estimated bill savings from the clean energy upgrades so that utility customers save money on their energy bills.

The proposed framework also includes strong customer protections including post-retrofit measure savings verification, protections against premature equipment failure, protections against predatory sales practices, customer notifications in keeping with Senate Bill 1112, and tenant protections.

Next, the CPUC will review the proposal and put forth a Proposed Decision. The Building Decarbonization Coalition encourages California utility regulators to act expeditiously to advance the proposed pilots and ensure that the state keeps up with its climate targets and deadlines. 


The Building Decarbonization Coalition (BDC) aligns critical stakeholders on a path to transform the nation’s buildings through clean energy, using policy, research, market development, and public engagement. The BDC and its members are charting the course to eliminate fossil fuels in buildings to improve people’s health, cut climate and air pollution, prioritize high-road jobs, and ensure that our communities are more resilient to the impacts of climate change.