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Report | 2023

Tariffed On-Bill to Finance Energy Efficiency and Decarbonization Retrofits for Multifamily Buildings in California

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This report delves into the critical role of building decarbonization in achieving California’s ambitious climate goal of net-zero emissions by 2045. To equitably decarbonize the residential buildings sector, Californians need accessible and affordable clean energy financing strategies to make significant investments to electrify and reduce energy consumption in all aspects of their daily lives.

To overcome financial barriers and gaps, the report recommends the adoption of tariffed on-bill (TOB) pilot programs. These programs offer financing and project delivery for both multifamily owners and tenants, enabling whole-building deep efficiency and electrification retrofits. By simplifying the process, reducing administrative burdens, and addressing split incentives between tenants and owners, we can achieve energy savings, reduce emissions, and lower utility bills.

The report highlights the importance of prioritizing the full participation of low- and moderate-income (LMI) homeowners and renters. With LMI families representing approximately 6 million households in California, or more than 40 percent of the state’s population, addressing their specific needs is crucial. These households often live in multifamily housing (a specific area of focus of the paper), face high energy burdens, and could experience adverse outcomes in the energy transition if not adequately considered in program designs and delivery.