New Legislation Will Make it Easier for Illinois Building Owners to Finance Energy Efficiency Improvements
Update: On August 27, 2013, Illinois Gov. Pat Quinn signed on-bill financing into law. The law makes it easier for multifamily building owners to invest in energy efficiency.
Increased investment in the energy efficiency of apartment buildings can help preserve affordable housing, create local jobs, and save money for property owners. But, building owners often need upfront capital to make these improvements, which can be prohibitive.
To this end, the Illinois General Assembly passed a law in 2009 creating an on-bill financing program that provides building owners a financing option for investing in energy efficiency. On-bill financing allows building owners to purchase energy efficiency measures with no required initial upfront payment by borrowing funds from a third-party lender and repaying the cost over time through electricity or natural gas utility bills.
Now, with the successful passage of Senate Bill 2350 on May 30, 2013, CNT Energy and supporters from the affordable housing and environmental communities have expanded and improved sections of the on-bill financing program to make it easier for multifamily building owners to invest in energy efficiency. The bill is awaiting Gov. Pat Quinn’s signature into law.
Namely, the amendment expands on-bill financing to buildings with up to 50 units, allowing more multifamily buildings to participate in on-bill repayment of energy efficiency investments. The program was previously available only to owner-occupied buildings with one to four units, and had not been used extensively. As a result, leading housing and environmental community groups pushed expansion to larger residential buildings.
The amendment improves the on-bill financing program in other ways, too. Less than $3 million in loans have been made under the existing program. The bill expands the eligible energy efficiency measures and increases coordination among gas and electric utilities to simplify the program. For example, new definitions in the program allow for financed measures that increase customer satisfaction and are cost effective when packaged with other measures.
The bill’s passage was made possible in part by a coalition that included CNT Energy, Enterprise Community Partners, Community Investment Corporation, Preservation Compact, Chicago Rehab Network, the Illinois Association of Realtors, AARP, and the Citizens Utility Board. The legislation is also supported by the Illinois Environmental Council, Sierra Club, the Environmental Law and Policy Center, and the Natural Resources Defense Council. The Illinois Energy Association, a trade association for electric and natural gas utilities, was instrumental in helping all parties reach consensus on the bill’s contents.