The nature of the regions served by electric cooperatives—with their challenging terrain, extreme weather, and far-flung membership—means innovation has always been an integral part of the co-op business model.

Another reality of serving rural regions, at least for the past several decades, is an economic landscape that encompasses some of the most impoverished areas in the country. A 2017 study from the U.S. Treasury Department found that electric cooperatives provide electricity in 364 of the nation’s nearly 400 Persistent Poverty Counties.

Fortunately for these regions, co-op ingenuity and concern for community is manifesting in a range of products and services that aid low- and moderate-income (LMI) households.

“Innovation and community focus are in our DNA,” says Jim Spiers, NRECA’s senior vice president for business and technology strategies. “As times have gotten tougher in rural areas, co-ops have stepped up big time to bring new technologies and tailor-made programs that keep rates low, provides essential services, and actively reach out to lower-income communities to ensure they don’t get left behind as our industry evolves.”

Co-op initiatives that help low- and moderate-income consumer-members run the gamut from community solar projects, time-of-use billing, and efficiency programs to on-bill financing for home upgrades, solar installations, and even electric vehicles.

“Electric cooperatives are community leaders and are well aware of the challenges many of their members face,” Spiers says. “Their focus is always on ensuring that the full breadth of their membership has access to the benefits of any new innovations they deploy.”

On-bill financing

There are about 100 co-ops nationwide that offer on-bill financing programs, in which members receive a product or service and pay for it over time as a charge on their monthly bills.

Many co-ops report mixed results with their initiatives, but a handful are exploring adaptations that are showing more promise.

For several years, a group of cooperatives in South Carolina have run a successful on-bill financing program called Help My House, which helps members pay for efficiency upgrades. It differs from traditional financing programs by tying the loans to the meter rather than the resident, so loans don’t need to be secured by good credit ratings. Co-op numbers show participants’ energy bills drop by an average of 34 percent, or around $288 per year. Capital for the pilot came primarily from a U.S. Department of Agriculture loan, which was supplemented by funding from participating cooperatives.

“You save enough to pay for the work,” says John Norsworthy, a member of Santee Electric Cooperative, in a video posted on the Help My House website. “It doesn’t make sense to me that anyone wouldn’t do it.”

Lindsey Smith, vice president for education at the statewide association Electric Cooperatives of South Carolina, says Help My House is most effective when implemented in partnership with other local and state organizations and assistance programs that can address challenges like roofing and other structural issues.

Thanks in part to the success of the South Carolina initiative, federal efforts like the Energy Efficiency and Conservation Loan Program and the Rural Energy Savings Program are now helping cooperatives around the country to develop similar programs. The latter offers $52 million in zero-interest loans to rural energy providers to make efficiency loans to homes and small businesses, and a portion of the funding is required to go to LMI members.

Other examples include programs at Ouachita Electric Cooperative in Arkansas and Roanoke Electric Cooperate in North Carolina, which both serve rural territories with high percentages of low-income members. Many are renters, and many live in energy-inefficient homes. Both cooperatives recently phased out their on-bill loan-based programs in favor of ones based on the pay-as-you-save (PAYS) model.

With PAYS, the member pays nothing upfront, doesn’t need a credit check, and doesn’t take on debt. The cooperative invests in energy efficiency upgrades for the home, and the member repays the cooperative through a fixed monthly tariff that’s calibrated to be less than the total energy savings. The tariff is tied to the meter rather than the member, which also makes it more attractive to renters who might not otherwise make upgrades to a home they do not own.

“The program is open to anyone, but it breaks down a lot of the barriers that have prevented low-income members from making energy efficiency improvements in the past,” says Marshall Cherry, chief operating officer at Roanoke Electric.

Energy efficiency and weatherization

The members who struggle to pay their power bills are often the least able to make energy efficiency upgrades, and their homes tend to be the ones that could benefit the most from weatherization improvements.

More than 85 percent of cooperatives have financing initiatives that help members invest in efficiency measures while avoiding high upfront costs. Such programs typically start with an energy audit to determine options and potential savings. Remedies include replacement of heating and cooling systems; installing smart thermostats and load control water heater switches; sealing ductwork and weather sealing of windows and doors; and adding insulation. As with the PAYS model, upgrades are usually made only if the expected energy savings will be more than the monthly financing payments.

Once the work is done, cooperatives conduct a second audit to verify energy savings. Financing is done as a loan with on-bill payback or as a fixed monthly tariff.

Another successful model in Arkansas showcases the value of energy efficiency with a handful of lucky consumer-members. Statewide association Electric Cooperatives of Arkansas and its member co-ops run the annual Energy Efficiency Home Makeover Contest, where winners get a comprehensive upgrade on their house. Themes change year to year and focus on things like lighting, heating and cooling, thermal barriers and air sealing, and manufactured housing. In 2017, the contest saw 5,500 entries, and 10 were selected for makeovers.

“I was freezing in the winter and burning up in the summer,” says Petit Jean Electric Cooperative member Linda Moore, a contest winner who saw her bills drop from $700 per month to $380.

Community solar

Community solar is a concept that was started by electric cooperatives and remains largely a co-op initiative. More than 75 percent of all community solar programs nationwide are run by cooperatives.

With community solar, the utility builds an array and offers panels to be leased or owned by members, who receive credits on their electric bill for the power produced. Any member can buy in, even renters.

Until recently, community solar has been offered as a premium product that sometimes requires upfront investment. But cooperatives are finding ways to lower upfront costs and expand their programs’ reach.

In Colorado, seven co-ops have launched “PV for All,” which offers a sliding fee scale for joining a co-op’s community solar program—PV is short for photovoltaic solar panels. Low-income households receive a 30 percent discount and pay no upfront or monthly costs.

The co-ops—Delta-Montrose Electric Association, Empire Electric Association, Grand Valley Power, Holy Cross Energy, Poudre Valley REA, Yampa Valley Electric Authority, and San Miguel Power Association—are working with the nonprofit GridAlternatives on the array build-outs as well as workforce development and community outreach.

“Cooperatives are great leaders in innovation and uniquely situated to put together new models that serve their members, especially those who struggle to pay their bills,” says Tom Figel, GridAlternatives’ policy and regulatory manager.

Time-of-use rates

At Garkane Energy in Utah, when you use power can be as important as how much you use. The co-op’s Half Price Energy time-of-use program lets members know when electricity is cheapest and gives them half off the amount they consume during that window. The co-op also tells folks when energy is most expensive and encourages them to defer use.

Windows are six hours and rotate from a morning peak in the winter to an afternoon peak in the summer.

“We looked at a lot of programs and realized that members didn’t understand peak demand,” says Neal Brown, Garkane’s member services and marketing manager. “We knew we needed a simpler message. We decided not to explain peak demand but instead focus on a program that would directly affect their pocketbooks by offering a lower bill.”

Participants can download a SmartHub app and monitor their daily power use. Brown says it gives members a sense of control and an understanding of what causes high bills and, on average, participants are seeing about a 15 percent reduction in their monthly charges.

“It’s been a way for us to work with members who struggle to pay their power bills,” Brown says. “Anyone is eligible to participate, but we’ve noticed the program attracts a lot of members that have limited incomes.”


Enabled by smart grid systems like advanced metering infrastructure (AMI) and meter data management, co-ops have found prepaid metering to be particularly helpful to low-income households, although the benefits are applicable across the membership.

Like certain mobile phone plans, prepay subscribers deposit money in an account and draw off of that balance when they use electricity. Modern grid communication and control allow the co-op to accurately track energy use and instantly connect accounts when payments are made.

Programs vary, but generally, participants are not required to pay a security deposit or reconnect fees. They also tend to use less electricity as they become more conscious of how much they use.

Co-ops offer multiple payment options, including telephone, online, in-person kiosks, and pre-pay terminals at convenient locations like grocery stores and gas stations. Alerts through text or email tell a participant when their balance is running low. Such messaging platforms are frequently expanded to include weather alerts, school closings, annual meetings, and even off-peak pricing.

Roanoke Electric Cooperative implemented prepay to address high delinquency rates—25 to 30 percent. About 10 percent of its members use prepay, and of those, more than 90 percent are LMI households.

Broadband plays a role

Reliable, high-speed internet access can make participation in some of these programs easier and more efficient. The Federal Communications Commission estimates that 34 million Americans lack adequate internet access, and co-op service areas are especially hard hit. Some 39 percent of rural Americans lack access to broadband, compared to just 4 percent of urban Americans.

This so-called digital divide can have widespread negative impacts on communities and disproportionately affects low-income residents by driving away prospective employers, stifling growth, and compromising educational success and health care.

A recent NRECA survey found more than 100 co-ops are involved in efforts to provide broadband service to their members. Jo-Carroll Energy in Illinois was one of the first.

More than a decade ago, Jo-Carroll started a wireless broadband business for its SCADA and AMI infrastructure and then leveraged it to provide internet service to its communities. Sand Prairie, the co-op’s broadband division created in 2008, began offering fiber-to-the-premises (FTTP) to its members in 2016. The co-op now serves over 2,000 members with high-speed internet service and is focusing on a system-wide fiber build out.