Energy efficiency financing

Energy Efficiency Financing Options for California Small Businesses

By Noah Proser

Small business owners are often on a tight budget. Those seeking to finance upgrades or expansions are wise to investigate all the options. One option that business owners may overlook for financing an energy efficiency upgrade is a loan from Pacific Gas and Electric Company (PG&E). A PG&E energy efficiency loan is a smart way to upgrade equipment because the loan terms are based on the estimated energy savings of the project.

Monthly loan payments are determined according to the energy cost savings that upgrades are expected to deliver over time, and they’re interest-free and free of fees, pre-payment penalties and other charges.1 That’s a tremendous deal for small businesses looking to upgrade while minimizing costs and maximizing liquidity.

Ray Bayly, owner of tortilla manufacturer Taco Works, was able to upgrade his factory and warehouse to save money and energy, thanks to the help of energy efficiency financing.

“PG&E’s financing program was just a good business decision. With no upfront money, we were able to install energy efficient lighting throughout our factory and warehouse and saw savings instantly,” said Bayly.

How it works
To qualify, businesses must have at least two years of continuous PG&E service and have a good PG&E payment history over the past 12 months. In addition, a project’s estimated energy savings must be sufficient to repay the loan during the payment term, which can be as long as 60 months.

The loan is paid back through your PG&E bill, using On-Bill Financing, or OBF. Loan terms and monthly payment amounts are determined based on the estimated monthly savings provided by the new products you install.

Taco Works qualified for a $9,856 zero-percent-interest loan from PG&E to help fund its energy efficiency projects, which included upgraded warehouse and factory lighting using high bay LEDs and installing exterior LED wall packs. The company also earned $2,290 in energy efficiency rebates.

With annual energy costs at approximately $22,707, upgrading to LED lighting allowed Taco Works to save 17% on energy costs, or an estimated $3,815 each year. Those savings provided an estimated payback period of 2.6 years.

In essence, the upgrades pay for themselves, allowing Taco Works to see increased savings and lighting performance at no long-term additional cost.

A sample project

Project Cost$10,000
Energy Efficiency Rebates and/or Incentives ($2,500)
Loan Amount (remaining costs to be funded) $7,500
Estimated Monthly Energy Savings from Upgrade $300 $300
Monthly Loan Installment Billed on Energy Statement $300 $300
Simple Payback Period 25 months

What kind of projects may be eligible?
Financing is available for many types of projects, including exterior and interior LED lighting, HVAC upgrades, food service equipment, refrigeration, water heaters and much more.

Combine with rebates to save even more
Rebates on energy efficient equipment allow small business owners to reduce the financial burden of buying new equipment even more by decreasing the amount the amount they need to finance through OBF.

Find out more
For full details on the PG&E energy efficiency loan program and how it can help you, download the eBook, "PG&E’s Guide to Financing Energy Efficiency Projects" And to learn how PG&E energy efficiency financing can work for your small business, contact your PG&E Customer Relationship Manager at 1-800-468-4743. They'll help you choose a project, confirm your eligibility and help you get started saving money as soon as possible.

  1. Pacific Gas and Electric Company
  2. Pacific Gas and Electric Company

Energy Efficiency Financing Options for Small California Businesses
  • SMB Blog Author
    Noah Proser
    Program Manager for On-Bill Financing. Oversees the On-Bill Financing (OBF) Program for PG&E’s non-residential customers. Noah works with PG&E’s Account Managers and Channel Partners to help customers overcome investment hurdles for energy efficiency. Previously, Noah worked in the California State Treasurer’s Office, supporting Property Assessed Clean Energy (PACE) and other energy efficiency financing programs in California.

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