South Carolinians now pay the highest electricity prices in the Southeast and have, since 2009, endured eight rate hikes from the state's investor-owned utilities.

Even more sobering, households earning less than $50,000 annually (just over half of the state's population)spend 22 percent of their take-home pay on energy; households earning less than $10,000 annually give up 75 percent of their income for energy bills. These residents are living in what's known as "fuel poverty."

Despite the magnitude of this problem, weatherization and retrofitting strategies improve a home's air sealing, insulation, duct work, and systems decreasing energy consumption and utility bills while increasing the energy efficiency of the home. Unfortunately, very little has been done to address the problem, and no public or private entity currently provides enough capital for a broad-scale energy efficiency program that touches all areas of the state.

The U.S. Department of Energy's Weatherization Assistance Program has helped provide efficiency upgrades to nearly 6 million homes over the last three decades, but funding for this program faces uncertainty in the future.

Federal Home Loan Banks - regional funding arms of the U.S. government - once provided forgivable loans for residential efficiency projects through their Energy Efficiency/Weatherization Product, but this financing option is no longer being offered.

The U.S. Department of Agriculture helps catalyze energy efficiency programs through grants and loans to rural utilities and electric cooperatives, but those resources are not designed to sustain programs over the long-term.

The S.C. Energy Office administers clean energy grants and promotes funding opportunities when available, yet they don't have the resources to implement efficiency programs throughout the state. And there are plenty of private businesses that specialize in weatherizing and retrofitting homes - if you can afford their services.

So, what we are left with in South Carolina is an enormous demand for residential energy efficiency programs and an inadequate supply of financing capital. In meeting this demand, our state would provide residents with affordable energy efficiency upgrades, spur job growth and investment in local economies, and foster a lucrative market transformation towards energy efficiency. But how?

The best approach may rest in the success of on-bill financing, the emergence of Community Development Financial Institutions (CDFIs), and the promise of a statewide Energy Efficiency Fund.

On-bill financing allows a homeowner to receive energy efficiency upgrades - such as weatherstripping, duct and insulation repair, and HVAC replacement - without having to pay for the up-front installation costs. The utility company instead finances the upgrades, and the homeowner's utility bill usually drops significantly. Then, a portion of the monthly savings goes back to the homeowner, and the rest goes to reimburse the utility.

Twenty states including South Carolina are already using an on-bill financing model to fund their energy efficiency programs. Three of our state's 20 electric cooperatives provide on-bill financing services for homeowners in their area, and Santee Cooper Power provides a low-interest, revolving loan program for ratepayers. Yet, to make a state-wide impact, electricity providers need help managing and expanding these programs and finding loan capital to sustain them.

That is where CDFIs come in. A CDFI is a non-profit financial institution that specializes in raising money - from public, private, national, and local sources - for economic development projects that increase local investment and job creation. A CDFI can reduce the utility's risk, overhead, and burden of managing an energy efficiency program, provide access to private capital markets, and handle due diligence associated with loan distribution and repayment.

In Kentucky, four rural utilities have partnered with the CDFI Mountain Association for Community Economic Development to administer energy efficiency improvements for 200-300 homes with just $2 million in initial loan capital. Going forward, the program will be sustained through a mix of government and private capital and loan repayment - all channeled through the CDFI.

The same kind of model can work in South Carolina where a third-party CDFI develops and manages a South Carolina Energy Efficiency Fund from which utilities can consistently finance projects in their service areas. Basically a large loan pool, the fund would provide significant savings for homeowners, greater operational efficiency for electricity providers, new jobs for local communities, and investment opportunities that produce a sizeable return.

Members of the General Assembly, the Electric Cooperatives of South Carolina, Santee Cooper Power and our investor-owned utilities should consider the significant economic impact of such a fund and work with the state's economic development leaders to make this opportunity a reality.

D. Lowell Atkinson is a program associate with the S.C. Association of Community Development Corporations, which is working to make energy efficiency and clean energy a higher policy priority in the state.