Five Years of Financing: How’s the On-bill Program in Holland Doing?

The short answer to this question is: great! Of course, at Michigan Saves, we know a good financing product when we see one, and we definitely know one when we help create it.

What’s the secret?

Successful programs bring compounding value and serve a wide range of consumers. Typical initiatives that help people to finance their energy projects and increase their energy savings look at credit scores and debt-to-income ratios to determine eligibility—it’s standard procedure, but can be inaccessible to those with credit challenges. An on-bill financing program, however, skips these entirely. Focusing on customers’ utility bill payment history, on-bill financing programs can help approve homeowners who’ve paid on time for at least 12 months in a row. The low-interest loans can then be repaid directly through the utility bill. On-bill financing makes renewable energy and energy efficiency upgrades more accessible to many who previously couldn’t make improvements.  The proof of program success is clearly in the pudding when it comes to the first municipality and municipal utility to pair up with Michigan Saves for on-bill—the City of Holland and Holland Board of Public Works (BPW)—who started their journey in 2016 with the Holland On-Bill Loan Program.

“It was an affordable solution to the problems we were facing with our home’s energy efficiency. It was a great experience overall.”

—Holland On-Bill Loan Program Customer

How did it all begin?

The city of Holland’s drive to improve energy efficiency and increase access to energy efficiency for all of their residents made them the perfect partner for Michigan Saves. Their long-range energy plan—a 40-year strategy to ensure city prosperity—includes goals for cost savings, energy supply reliability, and reductions in greenhouse gas emissions. Each of these areas requires customers to be able to take control of their energy spending, but officials knew it would be a challenge to get every household into a position where they could do just this. A new method of financing could help, and on-bill proved the best option for the city to open opportunity for residents.

Holland made a broad effort to include all of the voices that would be impacted by the on-bill opportunity, snagging input from contractors, neighborhood programs, energy providers, mortgage lenders, and many others. It was an impressive, all-hands-in effort. The City of Holland created the Holland Energy Fund to administer the program and complementary incentives and grants for Holland residents interested in energy efficiency and clean energy. Michigan Saves worked with the City, Holland Energy Fund, and Holland BPW to design and create the program and now manages the contractor network and provides reporting, quality assurance, and other administrative functions that support the program.

In the program’s first year, Holland Energy Fund financed seven on-bill projects, with the average amount financed sitting around $16,000 and the average annual energy savings hitting nearly 7,000 kilowatt hours (kWh).

So how’s Holland doing?

Pre-COVID-19, on-bill financing in Holland boomed and stayed steady, the numbers multiplying to the tune of tens of thousands of dollars and kWh. At times, the Holland Energy Fund, Holland BPW, and Michigan Saves served upward of 40 projects, averaging up to around $22,000 in financed amounts per project. To date, the Holland On-Bill Loan Program has saved city residents over 107,000 kWh of electricity—which equates to about 13.5 homes’ worth for an entire year, or over 9 million smart phones charged. Seems to us like they’re well on their way to reaching their 40-year energy goals.

“We’ve been extremely pleased with the Holland Energy Fund’s progress,” said Mary Templeton, Michigan Saves president and CEO. “They’re committed to efficiency and opening access to this tool for more residents, and we look forward to working with them for years to come

Calling all utilities!

Ready to get started with on-bill? Learn more about offering an on-bill program to your customers.