On-Bill Recovery Financing Program Frequently Asked Questions

On-Bill Recovery Financing Program Frequently Asked Questions for Small Businesses and Not-for-Profits

Q: What is the On-Bill Recovery Financing Program?
A: On-Bill Recovery Financing is a low-interest loan that eligible customers can use to finance the cost of recommended energy efficiency improvements to their facilities. Customers repay their On-Bill Recovery loan through a charge on their electric and/or gas utility bill.

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Q: How do I apply for an On-Bill Recovery Financing loan?
A: For solar projects: Your contractor will submit all information to NYSERDA for review and approval.  If the project is approved, you will receive an eligibility letter which can be presented to Barrett Capital Corporation when applying for an On-Bill Recovery loan. 

For air source and ground source heat pump projects: your contractor will submit documentation to NYSERDA for review and approval.  If approved, you will receive an eligibility letter which can be presented to Barrett Capital to apply for an On-Bill Recovery loan.

For energy efficiency improvements: Before applying for an On-Bill Recovery loan, small businesses and not-for-profit organizations must obtain a Qualified Energy Assessment through a NYSERDA program, a utility program or from a Qualified Energy Consultant that meets NYSERDA standards. NYSERDA’s New York Energy Study Program offers low cost Qualified Energy Assessments to eligible small businesses and not-for-profit organizations.

The Qualified Energy Assessment will recommend energy efficiency improvements the organization can make to lower its energy bills and reduce its environmental impact. The organization must then decide which recommended improvements it would like to finance.

Once the organization chooses the improvements it wants to finance, it must obtain contractor quotes on the cost of doing the work and submit a complete and signed Request for a Financing package

to NYSERDA by email at sceepadmin@nyserda.ny.gov or mail to:

Small Commercial Energy Efficiency Financing
Attention: Kevin Hunt
17 Columbia Circle
Albany, NY 12203-6399

Required forms and application instructions can be found on NYSERDA’s Small Commercial Energy Efficiency Financing webpage.

If NYSERDA approves the organization’s Request for Financing package, the organization can take the NYSERDA-approved Request for Financing package and eligibility letter to Barrett Capital Corporation to apply for an On-Bill Recovery loan.

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Q: What Lending Institutions issue On-Bill Recovery loans?
A: Barrett Capital Corporation provides statewide On-Bill Recovery loan origination services.  Barrett Capital Corporation can be contacted at bkorn@barrettcapital.com, or 212.434.3000.

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Q: How does the lender approve On-Bill Recovery loan applications?
A: Barrett Capital Corporation will issue an On-Bill Recovery loans to organizations with NYSERDA-approved Request for Financing Packages or eligibility letters that meet NYSERDA’s underwriting criteria.

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Q: What small businesses are eligible for the program?
A: Small businesses with 100 employees or fewer are eligible if they 1) own their building or 2) lease or manage all or part of the building and have a release from the building owner to apply for financing through the program. In addition, the applicant or co-applicant must have a Qualified Energy Assessment from NYSERDA, a utility or a Qualified Energy Consultant and must be named on the utility account of one of the participating utilities.

Participating Utilities:

  • Central Hudson
  • Con Edison
  • Long Island Power Authority
  • National Grid (upstate NY customers only)
  • New York State Electric and Gas Corporation
  • Orange & Rockland
  • Rochester Gas and Electric

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Q: What not-for-profit organizations are eligible for the Program?
A: Not-for-profit organizations are eligible if they 1) own their building or 2) lease or manage all or part of the building and have a release from the building owner to apply for financing through the program. In addition, the applicant or co-applicant must have a Qualified Energy Assessment from NYSERDA, a utility, or a Qualified Energy Consultant and must be named on the utility account of one of the participating utilities.

Participating Utilities:

  • Central Hudson
  • Con Edison
  • Long Island Power Authority
  • National Grid (upstate NY customers only)
  • New York State Electric and Gas Corporation
  • Orange & Rockland
  • Rochester Gas and Electric

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Q: Why does the business or not-for-profit have to sign a Declaration?
A: The borrower signs a Declaration to provide notice of the obligations under the loan to any subsequent purchaser of the property. If the borrower is not the owner of the property, the owner must sign the Declaration and have it notarized. The Declaration does not represent a lien on the property, but is recorded in a similar way as a mortgage.

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Q: When did the On-Bill Recovery Financing Program for businesses and not-for-profits start?
A: It began on May 30, 2012 for small businesses and not-for-profits.

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Q: What energy improvements does this program cover?
A: On-Bill Recovery Financing covers the purchase and installation of photovoltaic systems, ground source heat pumps, air source heat pumps and energy efficiency improvements.  Energy efficiency improvement must be identified in a Qualified Energy Assessment provided by NYSERDA, a utility program or a Qualified Energy Consultant to be installed in a building or space occupied by a small business or a not-for-profit organization.

To qualify for an On-Bill Recovery loan, the amount of money the organization is expected to save on its utility bills each year as a result of the project must exceed the organization’s annual loan payments. In addition, the estimated energy savings from the project must be sufficient to pay off the upfront cost of the project within 10 years.

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Q: Is there a maximum revenue level to participate?
A: No.

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Q: Will businesses and not-for-profits really see no increase in their energy bills because the financing of energy improvements will be offset by their energy savings?
A: The loan will be designed so that projected annual energy cost savings will exceed annual loan payments. However, an organization’s monthly utility bills may not always be lower as a result of the project if, for example, the organization stays open for more hours, increases its energy use or if energy prices vary.

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Q: How much is the maximum amount of the loan?
A: The maximum amount of the loan is $50,000.

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Q: What are the financing terms?
A: The loan will be priced at 0%, subject to change. The loan term cannot exceed 10 years.

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Q: Will participation loans through Green Jobs-Green NY still be available or do businesses and not-for-profits have to use On-Bill Recovery to get a loan from NYSERDA?
A: Participation loans will still be available. The On-Bill Recovery loan is an additional financing option.

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Q: What are the credit standards?
A: Guarantor’s credit score of 650 or higher. No individual guarantor or corporate bankruptcies within the last five years. No individual guarantor or corporate judgments or liens in excess of $5,000. Debt service coverage ratio of greater than 1.2. In addition, the organization must have been in existence for at least two years.

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Q: What utilities are participating in On-Bill Recovery?
A: The law requires that the following utilities participate: Central Hudson, Con Edison, Long Island Power Authority, National Grid (upstate New York customers only), New York State Electric and Gas Corporation, Orange & Rockland, Rochester Gas and Electric.

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Q: Does the business or not-for-profit have to use certain contractors to participate in On-Bill Recovery?
A: A small business or not-for-profit owner may use any contractor for the energy efficiency improvements.  Photovoltaic and air source and ground source heat pump installations must be completed by a qualified installer approved by your electric utility. 

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Q: When does the business or not-for-profit need to start paying back the loan?
A: Payments begin within two or three utility billing cycles after the contractor has completed work and a Certificate of Completion has been sent to the lender. 

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Q: Who pays the contractor?
A: Loan proceeds are paid directly to the contractor.

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Q: What happens if the business or not-for-profit doesn’t pay this portion of his/her utility bill?
A: A late payment charge will be incurred during any timeframe in which the customer is no longer receiving a bill from the utility (if the utility terminates the customer’s service for nonpayment; if the customer requests the utility terminate the service; and if the customer requests temporary service suspension). During this timeframe, the customer will receive a direct statement billing from NYSERDA’s Loan Servicer. If the customer does not pay that bill when due, the account will be subject to a late payment fee of 1.5% of the unpaid principal and interest charges.

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Q: Is there a penalty for pre-payment?
A: No.

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Q: Is there a minimum loan amount for an On-Bill Recovery Loan?
A: No.

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Q: Does the business or not-for-profit have to pay off the loan if it sells the building?
A: No. The loan is transferable to the new owner unless the parties agree that it will be fully paid prior to transfer. Likewise, a business or not-for-profit that leases a space need not pay off a loan at the end of its lease unless the parties agree that it will be fully paid off prior to the end of the lease.

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Q: How will the On-Bill Recovery Financing Program affect oil and propane customers?
A: Oil and propane customers who implement recommendations from a Qualified Energy Assessment are eligible for the On-Bill Recovery Financing Program. The cost of energy improvements will be on their electric bill. Their electric bill will, therefore, increase and savings will be found on their oil or propane bill.

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Q: Can a customer who purchases electricity and/or natural gas from an Energy Services Company (ESCO) with billing provided by a participating utility receive an On-Bill Recovery Loan?
A: Yes, a customer who purchases their electricity and/or natural gas from an ESCO, but is billed by a participating utility, is eligible for an On-Bill Recovery Loan.

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Q: When did the On-Bill Recovery Financing Program law pass and what was its purpose?
A: The bill was passed by the New York State legislature in June 2011 and signed into law by Gov. Andrew Cuomo on August 4, 2011. Its purpose is to provide a mechanism to encourage New York homeowners, businesses, not-for-profits, and multifamily building owners to make energy-efficiency improvements to reduce energy consumption and carbon emissions.

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