Simple, cost-effective and appropriate to the task. Standardized, easy to deploy and locally financed. That’s the promise of a new solar technology and new way of financing, coming to a home near you.

Lots of New Mexicans would love to put solar panels on their roofs or in their yards, but it’s too expensive or they do not think their roofs could handle the extra weight. And while it’s exciting that new large solar arrays are being installed throughout the state, they do not help people reduce their own electric bills.

Introducing pole-mounted solar arrays: four rack-mounted solar panels atop a 10-foot pole anchored to the ground. The first two prototypes are now up and operating at Nambe Pueblo homes. Solar-output data confirms that these arrays can cover all or a good portion of one’s electric needs.

What’s it going to cost and how can one pay for it? While they are still at the prototype stage, pole-mounted solar arrays should come in under $5,000. While some folks can write a check for that, most cannot. Enter on-bill financing, which is a way for utilities to front the costs and then have participating customers repay the costs over time.

On-bill financing can cover the costs not only of solar but significant improvements such as heat pumps and even electric car chargers. Should the utility choose to adopt this approach, its customers can look forward to adopting a suite of clean energy measures and using an easy way to pay for it.

An on-bill financing program is one in which a customer repays the upfront capital for clean energy improvements on her utility bill. It takes advantage of the familiar and convenient payment mechanism, the good old monthly utility bill. An on-bill program aims for cash-flow positive projects, so that utility savings outweigh any new payments.

On-bill programs around the country have been up and running since the 1970s, including over 100 rural electric co-ops. These programs have invested over $2 billion in significant energy improvements with default rates ranging from 0 percent to 3 percent.

A successful on-bill financing program incorporates flexibility to invest in clean energy while maintaining five design principles. First, loans to program participants should be bill neutral or better, and interest rates should be set at or below 5 percent, in order to assure cash-positive flow for participants. Second, participants should not be required to make upfront payments for home improvements. Third, programs need strong quality assurance plans that keep contractors accountable. Fourth, programs should finance a “whole house” set of energy efficiency and solar energy measures to maximize cost-effective savings. And fifth, to be more accessible to the poor, programs have to offer alternative methods of loan underwriting, such as good bill payment history in lieu of a credit check.

A water, gas or electric utility offering on-bill financing for clean energy improvements provides an essential service to members who want to make energy-related investments but are not in a position to make an upfront cash purchase, especially for high-cost items.

Bringing new solar technology and on-bill financing to New Mexico will bring us closer to the day when any New Mexican family, no matter their income or ownership status, can afford to live in a home powered by the sun.

Ken Hughes is retiring from the state of New Mexico after 26 years, most recently as a clean energy specialist. He lives in Santa Fe.

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