Nevada Governor Signs Green Bank Bill

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This week, Nevada Governor Brian Sandoval (R) signed a bill establishing a Nevada Green Bank into law. The bill directs the Nevada Governor’s Office of Energy to create an independent, nonprofit corporation named “the Nevada Clean Energy Fund.” The Nevada Clean Energy Fund purpose will be to support the deployment of clean energy technologies in the state. To accomplish this goal, the Clean Energy Fund will offer a range of financing structures, forms, and techniques for clean energy projects.

A Green Bank is an enormous opportunity for Nevada

This bill is the culmination of a multi-year Green Bank effort in Nevada. During the 2015 legislative session, State Senator Pat Spearman sponsored legislation that directed the Interim Legislative Committee on Energy to complete a study of a Nevada Green Bank. The Coalition for Green Capital (CGC) immediately stepped in to offer support on executing the study, working in partnership with the Governor’s Office of Energy to complete the analysis. Over the course of eight months, CGC met in person and by phone with policymakers, clean energy advocates, the regulator, installers and others to understand the clean energy landscape in Nevada.

The study found there was a compelling case for a Green Bank in Nevada. Distributed technologies, like rooftop solar and efficiency, represented at least a $3.5 billion investment opportunity in Nevada. Roughly 90% of Nevada energy is imported, creating an enormous opportunity for Nevada to retain a greater number of energy dollars spent in the state by investing in in-state energy resources. Nevada residents are paying some of the highest electricity prices in the Mountain West. These facts point towards the need for a Green Bank. As stated in the report:

Green Bank investments would increase the state GDP, create new businesses, lower energy costs, and create new jobs. The Connecticut Green Bank, serving a market similar in size to Nevada, has generated almost a $1 billion of total clean energy investment in five years of activity.

The study included interviews with over 50 Nevada stakeholders, who expressed enthusiasm for a dedicated clean energy finance institution in Nevada. Stakeholders noted the difficulty of accessing financing at attractive rates and the decline in energy rebates as key challenges holding back the growth of clean energy markets.

Nonprofit Green Bank model growing more popular

The study recommended that the state create a nonprofit corporation to serve as the state Green Bank, which was the path ultimately selected in the legislation. Through our work across the country, CGC is seeing growing interest in the model of creating Green Banks as independent nonprofits rather than governmental institutions. In addition to Nevada, Montgomery County, Maryland also opted for a nonprofit approach for its county-level Green Bank. While there is no “right” way to create a Green Bank, state and local governments may opt for a nonprofit model to accelerate institutional formation and open the door to more diverse capitalization sources, such as philanthropy.

With the bill now signed, the next step is the actual formation of the institution. CGC looks forward to continuing our engagement in Nevada and supporting in-state partners as the formation process gets underway.

Nevada’s entrance onto the Green Bank scene is the latest indication that the Green Bank movement is picking up steam. Nevada joins states such as Connecticut, New York, and Rhode Island in establishing state-level Green Banks. Earlier this year, the mayor of DC announced her intention to form a Green Bank. At the end of last year, US Green Banks had participated in over of $2 billion of clean energy transactions. Expert observers have noted that demand for state and local Green Banks may accelerate in reaction to the US withdrawal from the Paris Agreement, as leaders pursue alternative pathways to lowering emissions. Green Banks are particularly attractive for policymakers because they do not depend on federal policies to have a positive impact on local jobs and energy markets.

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