Southern California Gas Co. and San Diego Gas & Electric Co. have $5 million apiece burning a hole in their pockets that they want to lend, at no cost, to small businesses to buy energy-efficient equipment.
Southern California Edison has about $2 million for interest-free loans to small companies to do the same thing -- replace light fixtures, refrigeration units, air conditioning systems, water heaters and other equipment that use too much energy and cost business owners a pile of money to operate.
The hope is that the new equipment will allow small businesses to save at least as much money on their monthly energy bills as the cost of their monthly loan payments. Once the loan is paid off, which has to occur in five years or less, a business will enjoy lower bills for the long term.
The business owns the equipment and saves money, the utilities get closer to their mandated energy saving goals, for which they get monetary rewards, and California reduces its reliance on fossil fuels while cutting the amount of greenhouse gases it produces.
And the program means new sales for equipment makers and installation companies that have sprouted up to serve the major energy-efficiency push launched in California for 2006-09.
"It's a win-win-win deal," said Tom Hall, president of Eco Energy Systems, a lighting retrofitter in San Marcos, Calif.
Edison, which is just hitting the streets with its pilot loan program geared to small grocery and convenience-store owners, expects to attract customers who don't have the time or money to implement energy-efficiency projects.
"You are capturing savings that would otherwise go uncaptured," said David Bruder, manager of nonresidential programs for the Edison International unit.
Loans will range from about $5,000 to $50,000.
Collateral and business credit checks aren't required, but a customer must have a good payment record with the utility. And the new equipment must meet certain efficiency standards. The utility pays for the equipment, after applying any of the sizable rebates frequently offered for purchases of energy-efficient equipment.
The loan will be paid through a charge on a small company's utility bill, hence the program's formal name: on-bill financing.
The fact that small businesses will not have to lay out their own cash upfront will be an important sales tool.
