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What is PAYS®?

Pay As You Save® is a utility investment model designed to expand customer access to cost-effective energy upgrades at customer sites, such as weatherization, building energy efficiency, solar installation, and electric vehicle adoption.


The PAYS® model is affordable, accessible, and low-risk to all parties.


  • The utility invests in cost-effective energy upgrades -Customers pay nothing upfront; it is not a loan

  • Utilities may use their own capital, 3rd party capital, or access 0% interest loans from the USDA

  • To recover costs, utilities place a tariff on the customer’s bill 

  • Monthly charge to customer is less than estimated monthly savings, so customers enjoy immediate and sustained cash flow

  • Once the investment is paid back, the electric bill drops even further 


This method provides energy upgrades for customers regardless of rental status, credit score, or housing type. Because the tariff is attached to the meter and not the individual, it transfers to the next resident if the customer moves.


For a further explanation of this system, see this 1.5 minute illustrated video

Why Use PAYS®?

The PAYS® model works to save both utilities and homeowners money.


Business Case for Utilities:

  • While helping customers to buy less energy from your utility sounds unwise, it actually saves utilities significant amounts of money

  • By reducing their peak load, the average co-op doing PAYS gets $10,000 return on an investment of $3,000 per participating home. 

  • These investments can be made using 0% interest USDA RESP loans that do not factor into debt-to-equity calculations

  • Turnkey program operators can handle contractor training, customer targeting, retrofits, QA/QC, EM&V, and reporting.

  • Low risk: PAYS programs have experienced zero defaults to date.


Benefits to members:

  • Lower bills

  • Healthier and more comfortable homes

  • Improved housing value


Overall, the PAYS model allows utilities to save money through low-risk investments while simultaneously  improving their relationship with their customers.


Q: Will this increase the number of charge offs? 

A: Data has shown that after starting PAYS, utilities experience the same or fewer charge offs than before PAYS.

Q: Will there be more member defaults? 

A: Of nearly 5,000 projects completed in the US using the PAYS on-bill-financing model, zero member defaults have occurred. Since customers’ cash flows are immediately increased, their risk of default should not increase.  

Q: What happens when someone moves?

A: Because the investment is tied to the meter, rather than a customer, the tariff simply transfers to the next occupant of the home. 

Q: How will potential next occupants be informed about the previous retrofit and current tariff on the meter's bill? 

A: The information about the tariff will be clearly listed when a title search for the property is done. Additionally, the utility will be responsible for informing the new occupant when they move in. 

Q: Can this payment model be applied to commercial buildings?

A: Yes. It can also be used for transportation (e.g. electric vehicles), solar PV, and other technologies. 

Q: How long are the payback periods?

A: Approximately 10 years for full repayment, after which the customer's bill will drop again. 

How do I Create a PAYS® Program?
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Internal Buy-In

Developing a PAYS program for your co-op will obviously require commitment from the co-op staff. While it will take employee time to manage, it should also decrease the time necessary to handle customer complaints, as customers' homes become healthier and more comfortable.

Board Approval

The Board of Directors must approve your co-op’s plan to develop a PAYS program. Providing information in the “Why Use PAYS” section above might encourage them to do so. The “Meet the Partners” section below provides contact information for co-ops that have already created PAYS programs, if you would like to seek their input on how best to approach your Board.

Regulatory Approval

Depending on your state, there might be regulations regarding the implementation of PAYS programs. LibertyHomes can help you to determine if any such regulation exists and to obtain approval if necessary.

Business Model/Financial Analysis

Utilities can contact organizations like Clean Energy Works for assistance with creating a business model. You can also seek assistance from other co-ops that have successfully obtained USDA funding.

Secure Funding

The USDA offers multiple options of zero-interest or low-interest loans for which co-op PAYS projects would qualify. You can contact EESI for application assistance, or contact other co-ops that have received money from the USDA. You can also look into utility credit enhancement in the form of a reserve fund. This will make your utility a safer and more attractive investment.

In designing your PAYS program, you must decide what measures you want the program to cover, how many people you want to include, and how to vet prospective participants. A program operator will help direct these discussions.

Scope Program


Your program operator will bring in a third party to conduct EM&V on all customer project sites. 

Final Program

Your program operator will handle the program once it begins, including doing customer energy audits, finding contractors, doing data tracking, and doing QA/QC on all projects. LibertyHomes may be able to carry out customer satisfaction surveys to collect participant data before and after the retrofits are done.

Step-By-Step Guide

Step 1: Determine status of PAYS® in your state and whether regulatory approval is necessary

Schedule meeting with LibertyHomes by filling out this Google Form

Step 2: Make a business plan and do a financial analysis

Schedule Meeting with Clean Energy Works for assistance by clicking this button

Step 3: Apply for USDA funding

Schedule a call with EESI for free application guidance

Step 4: Contract with a program operator to handle customer energy audits, contractors, data tracking, and quality assurance/quality control

Contact EEtility to discuss their program operation model

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