Revolutionary clean energy technologies often make headlines, but the nuts and bolts of supporting the scale-up of new technologies typically take a backseat. However, the emergence of new clean energy finance tools has begun to gain media, as well as political, attention. One such tool is the clean energy finance authority, also known as a green bank.
A green bank is generally a type of public-private partnership that offers low-cost capital to support the deployment and commercialization of proven clean energy technologies, though it can take many forms. It uses initial government funds to leverage private investor capital, thus increasing private sector involvement in the financing while decreasing investment risks. A green bank may be scaled to the local, state, national, or even international level. Since 2011, several state-level green banks have been established within the United States, the first of which was Connecticut’s Clean Energy Finance and Investment Authority (CEFIA). New York, Vermont, and Hawaii have also developed green banks, with several other states at various stages of proposing or approving legislation for a green bank.
Last week, Energy Innovation published a working paper about the purpose, structure, and functions of state green banks, highlighting CEFIA as a case study. The paper also includes a list of strengths and weaknesses of state green banks as a tool for accelerating clean energy deployment. Reed Hundt, CEO of Coalition for Green Capital, has also recently published an E-book that offers policy recommendations that will help move America away from dirty, exhaustible, heavily-regulated energy sources, and toward a clean power platform. His book, “Zero Hour,” suggests continued establishment of and support for state green banks, and recommends the creation of an international green bank, led by China and the United States, to provide low-cost capital for clean energy in the developing world.
Strategies for increasing these green bank opportunities will be discussed at next month’s Green Bank Academy, a two-day event bringing together energy and finance officials across many states “to learn about and discuss the establishment and coordination of state ‘green’ banks” through a combination of presentations, keynote speakers, and workshops. The goal of the Academy is to help states create green banks that align not only with their clean energy goals, but their capitalization resources and organizational structures. Hosts of the Green Bank Academy – Coalition for Green Capital, CEFIA, and Brookings – hope this event will spur the green bank movement by equipping state leaders with the concepts and tools they need to build their own green banks, and make finance opportunities for clean energy more affordable and ubiquitous across the country.