Alternative Underwriting Criteria — Using Utility Bill Payment History as a Proxy for Credit: Case Study on Clean Energy Works Oregon

Launched as a Portland-based pilot in April 2010, Clean Energy Works Oregon (CEWO) provides outreach, education, incentives, and financing to encourage Oregon residents to improve the efficiency of their homes. A key element of the program is low interest financing that is repaid through a line item on the utility bill. For households motivated to pursue energy efficiency, access to low-cost capital is often a barrier to investment. Many of the largest energy efficiency loan programs have application decline rates of 30 to 50 percent. Using alternative underwriting practices, CEWO has achieved a rejection rate of just 10 percent while also maintaining a low loan default rate. The program is also notable for its provisions for addressing deferred maintenance and other housing issues that are present in some homes and must be addressed before, or in conjunction with, an energy upgrade.

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