Guest Column by John-Michael Cross, Policy Associate, Environmental and Energy Study Institute (EESI)
Last year, I moved into a 115 year-old home after years of living in modern apartment buildings. The house was in pretty good shape, but I knew from a career of advocating for home energy upgrades that it very likely needed efficiency improvements.
And my first Minnesota winter loomed.
I had a better idea than most at the likely price tag and benefits of the upgrades, but I was still left wide-eyed when the bills came due. The rebate checks from my electric utility helped a little, as did the lowered heating bills. But — we only were able to get the work done because my wife and I were fortunate and privileged to have the cash on hand to cover the upfront costs.
So many families are not as lucky and are unable to participate in utility incentive programs – even though these families would stand to benefit the most. In order to help households at all income levels reduce their high energy burdens, particularly in rural areas, utilities need to look at innovative financing models that eliminate upfront costs while increasing home comfort and energy savings.
Help For Rural Electric Cooperatives and Utilities
In 2014, the U.S. Congress created a way for rural electric cooperatives and other rural electric utilities to provide their members with the chance to upgrade their homes and businesses without any initial investment, paying for the insulation or other energy upgrades through a monthly fee on their utility bill.
The program — the Rural Energy Savings Program (RESP) — is administered through USDA’s Rural Utilities Services to provide rural electric utilities with zero-percent interest loans to capitalize customer-focused energy efficiency financing programs.
USDA defines “energy efficiency” broadly in this program – it even includes small-scale renewable energy projects! The utility just has to show that each financed project will cost-effectively lower overall energy costs for the participant. RESP funds can also be used for lighting upgrades, building envelope improvements, HVAC systems, water heaters, water and waste efficiency improvements, fuel switching projects, and permanently-installed energy storage devices.
Cooperatives can even apply for funds to fully replace aging, inefficient manufactured homes.
Note that RESP funds are provided at zero-percent interest for 20 years. Utilities then relend (or invest) these funds to their member-customers at rates of up to five percent for 10 years, though most utilities to date have kept rates below three percent.
Where To Find More Information
My organization, the Environmental and Energy Study Institute (EESI), has worked to promote RESP since its inception, and provides no-cost technical assistance to help interested cooperatives apply for the program.
Because RESP aligns with EESI’s primary goal of accelerating the transition to a new, low-emissions economy based on energy efficiency and renewable energy, we want to see as many rural cooperatives as possible take advantage this program.
We want to see these dollars invested in rural communities, helping lower bills and spurring local economic development. We also push financing models that emphasize equity and inclusion, so that everyone in a utility service territory can participate. (This includes using good bill payment history in lieu of a credit score if the upgrades are expected to produce a positive cash flow.)
Project Examples
Exciting RESP-funded projects are launching around the country. Some important examples:

• In Washington State, one co-op launched “Switch it Up!” to provide debt-free financing for ductless heat pumps and heat pump water heaters that can cut heating bills in half, as well as the installation of electric vehicle chargers. One member organization that took advantage of this was the Outlook Inn whose owners were able to switch all 17 rooms from expensive propane heat to ductless heat pumps, which they couldn’t have afforded without financing.
• A group of South Carolina co-ops created the “Help My House” program, which helps their members finance energy efficiency improvements to their homes through their electric bills. One member who took advantage of this program is now saving up to $250 a month on her summer energy bills – even with the loan repayment added to her monthly bill.

Many cooperatives taking advantage of this program have reaped additional benefits through RESP such as reduced per capita energy use and peak load shaving, which can reduce the need for new power generation facilities.
Rural utilities that want to apply should first submit a letter of intent to USDA (the agency provides a sample here). Once approved, the utility must put together the full application. More than $100 million is available in the current round, with letters of intent due by September 30, 2019.
Interested in learning more? Please contact me at jmcross@eesi.org to learn how you can take advantage of this program and what EESI can do to help.