Financial Considerations

18. Payback Period. Some panelists commented that a 3-year payback period is typically the maximum that most customers will consider to make an energy efficiency investment. How can the Commission encourage future program administrators to develop new program designs to address this constraint? What types of programs are most attractive to reduce the payback period to this three-year threshold?

19. Access to Capital. Many panelists, especially those speaking for small businesses, government facilities, and low-income households, indicated that it is difficult to get the funds needed up-front to pay for efficiency measures. Some panelists suggested there be greater attention to financing mechanisms that help address this cash flow problem, such as via low interest financing, "green" credit cards (where interest rates are lower for Energy Star products), or "on-bill financing", where energy efficiency purchases are financed and repaid directly on the utility bill over a period of years, hopefully matched by bill savings from lower energy use. How important do you think it is for one or more of these kinds of financing programs to be offered, and if so, for what kinds of end users?

20. SPC program design. We heard from industrial customers that they will invest in energy efficiency measures with a three-year payback or less even if the Standard Performance Contract rebate is not available. Should administrators be encouraged to develop new program designs that do not provide cash if the payback period is less than three (or two) years? Should the Standard Performance Contract only fund programs that have a payback period of more than 3 (or 2) years without the SPC rebate? Should the Commission be involved in making decisions on payback period for SPC or any other type of efficiency program?