Sustainable development has quickly become an important theme in local governments facing environmental challenges. Energy efficiency can be part of local efforts to sustain economic development while protecting the environment and natural resources. Based on a national database, this study examines U.S. city governments’ strategies to finance energy efficiency. The result suggests that energy efficiency financing (EEF) has become part of local sustainability strategies. In the study, we offer an explanation for energy efficiency funding that emphasizes political behaviors of institutional players in budgetary decision making. We examine factors influencing adoption and progression of EEF. The results highlight the importance of explaining results of EEF to citizens. Technical expertise from professional organizations helps start EEF programs. A Democrat-leaning consistency is important to adopt EEF, but only in cities without substantial strategies promoting EEF. Cities with revenue declines are less likely to implement EEF.