The state Public Utilities Commission recently struck a blow for consumerism with a decision to approve the concept of "on-bill financing," principally aimed at electricity ratepayers who can’t afford the up-front costs of photovoltaic solar panels and other expensive upgrades but want some advantages of green energy.

The decision issued Feb. 1 by the commission clears a critical hurdle but only a preliminary one, and more steps need to be taken, including the passage of one key piece of legislation moving through the state Capitol.

A related measure, which has been shelved for now, proposed a community-based system enabling people to buy a stake in a solar installation. That’s another consumer-empowering idea that should be revisited, once the finer points of on-bill financing have been worked out.

The PUC order, which followed a study of this new financing scheme, essentially finds that such a program could be financially viable, clearing the way for further decisions that will shape its final form.

For example, most of the excitement around this program lies in the idea of installing PV panels on houses through a low-cost loan, enabling the loan to be paid off through the monthly electric bill. This may be enticing for homeowners who would like to pay off the bill for PV panels slowly, and would even enable renters to gain some of the cost-savings of solar energy, since they would be paying the lowered electricity bill.

However, one of the things the commission also will explore is how many other improvements and devices, such as energy-saving water heaters or whole-house fans, could be financed this way.

In the coming weeks a working group will meet to hammer out some of these details, said H. Ray Starling, who, as program manager for Hawaii Energy Conservation and Efficiency Program, is part of that working group.

Hawaii Energy is the independent agency, working under contract with the PUC, that administers the program set up to encourage customers to use less energy. Conservation is made more attractive by offering incentives to reduce the cost of installing energy-saving devices, incentives underwritten by the "public benefits fee" (PBF) fund; the fee is an assessment that appears on every electric bill Hawaiian Electric Co. issues.

What the working group hopes to resolve in the next few weeks includes details on how on-bill financing would work. The initial indications are that the PBF fund would be tapped to provide some security funding to offset the risk of default by customers who default on their payments. The experience in on-bill financing programs elsewhere is that this risk is low, but having that security will help lure other outside investors to put up money that will earn them a fairly safe return.

House Bill 856 is the measure (Senate Bill 1087 is its companion) that would authorize the sale of "green infrastructure bonds" to such investors.

The administration of Gov. Neil Abercrombie favors this financing approach and made a compelling case for it in testimony before the House Committee on Energy and Environmental Protection.

Richard Lim, director of the Department of Business, Economic Development and Tourism, cited a December 2012 survey by the research group OmniTrak showing 70 percent indicating they were likely to make energy-saving improvements if the low-cost loans were available. The bill, as Lim suggested, would help the state leverage both public and private capital for the program.

The other initiatives supporting the continued boom in the solar industry, such as the tax credits, have been helpful in increasing access to this energy source; Hawaii needs to tail off these supports gradually.

But the new financing scheme provides a parallel ramp to green energy savings for many who have largely been overlooked.

Charting Hawaii’s course toward a more reliable and self-reliant energy future requires a balance of investments in new technology with shorter-term savings to give ratepayers some more immediate relief. It’s with the short term in mind that the state must weigh the prospects of U.S.-produced sources such as liquefied natural gas. If prices pencil out, it could potentially displace the other fossil fuel in the portfolio: petroleum.

These prospects should be evaluated without losing sight of the larger goals of conservation and conversion to more isle-produced renewable sources. The latest PUC step is a good one and, as Starling correctly observed, Hawaii can’t afford to lose momentum.

"This is a long race and we have to keep the pace up," he said. "We’ve got a groundswell going and we really want to sustain that."