The Clean Energy Future Blog

By Jeffrey Schub

The most common question about the proposed National Climate Bank is, what the organization will actually do. The concept of leveraging private investment, and delivering job creation and environmental justice benefits can be compelling. But there is nothing more clarifying than the real-world example themselves.

That is why CGC and its partners have been working hard to create a series of detailed “use cases” that illustrate precisely what markets the Climate Bank – or the Clean Energy and Sustainability Accelerator as it was named when it passed the House last month – will invest in. They explain what the barriers are that slow investment and technology adoption, and the exact interventions the Accelerator and its state/local green bank partners will make overcome those barriers and drive investment. The detailed transaction schematics show the flow of money, how the end-users and the clean energy industry benefit, and how new opportunities for private investment are created.

And we are pleased to share here the first of these uses cases, focusing on delivering lower-cost solar power to low-to-moderate income (LMI) households through community solar installations. Community solar is an exciting application of solar PV technology because it enjoys the scale benefits of ground-mounted, grid-tied larger projects while delivering the economic benefits of rooftop solar PV to participating households.

Community solar also presents a solution to the inherent inequity of rooftop solar – one has to own a home in order to put solar panels on the roof. Homeownership rates are decline as income level falls, which means LMI households who rent are left out of the rooftop solar revolution.

However, simply signing up hundreds of LMI households to subscribe a community solar project isn’t so easy. There are a number of barriers that slow investment and ultimately participation of LMI households. These include:

• Community solar projects are complex and expensive to develop and pull together, even more so when the serve LMI households due to high marketing and subscription management cost;
• Capital providers that would normally invest or lend to a community solar project are hesitant to do so if the subscribers (and the repayment source) are LMI households because the lack of repayment data from this set of customers leads to a perception of high repayment risk; and
• If capital is extended to projects, it is likely at a cost that results in a solar price offered to potential subscribers that is actually more expensive than current power prices.

In this first case, two interventions are presented to overcome these barriers. The first, developed by the Maryland-based Climate Access Fund, is the LMI Revenue Guarantee Fund. The Accelerator would provide the seed capital necessary to create the Fund, which would in turn provide a partial guarantee to the private capital providers. This guarantee will stand behind the LMI household subscription payments, ensuring that up to pre-determined limits, private capital providers can be certain they will earn the revenue they expect from the project.

The purpose of this intervention, besides unlocking clean energy and savings for LMI households, is to build up a track record of real data on the true repayment risk so that in the future private capital will flow into these projects more freely and at prices that accurately reflect the risk. There are 50 million LMI households in America, and every one of them deserves cleaner and cheaper energy, whether or not they own their own home. The Accelerator can unlock this investment and market opportunity with this intervention.

The second intervention offered is modelled off the work of NY Green Bank. High upfront development costs are not only a barrier to project completion, but have negative impacts upon project completion. Development capital is expensive, so the more that is used in the more, the higher the resulting price of solar power is going to be in order to generate revenue sufficient to repay the development capital. 

But some of the development capital is used to pay costs that are actually very low risk. For example, community solar projects often need to pay a significant upfront interconnection fee to the grid operator or utility to secure the right to sell its power into the grid. This fee is paid well before the project is operating and generating revenue. So the developer must use expensive development capital to pay this fee. However, for a well-structured and planned project, the likelihood of that project ultimately reaching completion and producing revenue is high. So the Accelerator, again working with state/local green bank partners, will extend an interconnection fee bridge loan, which is at a lower cost than the limited development capital. And the bridge loan is repaid upon project completion.

The benefit to this intervention is that the developer can proceed quickly with project development without seeking raise additional capital or tapping into expensive capital on hand. And the project costs overall are lower because the bridge loan has a lower cost of financing than the development capital. This lower development cost translates to lower solar prices for customers once the project is operational. Lower solar prices mean more customers and a larger total addressable market.

Both interventions are principled designed to achieve the same goals: unlock private investment that wouldn’t otherwise flow into clean energy projects, and do so in a way that delivers more and cheaper clean energy to end customers. And in the case of LMI households, in particular, expanding access and lowering energy burdens are critical to ensuring a just and equitable transition.

This is just the first of many cases. Here are just few more in the pipeline:

• Aggregation of small business upgrades through commercial property assessed clean energy warehouse facilities
• Lowering the upfront cost of rooftop solar through REC-based upfront financing
• Swapping coal power for renewable power for rural electric co-ops + decommissioning and worker transition support
• Whole home clean energy and resilience upgrades for LMI households
• Home electrification financing with electric heat pumps

So stay tuned for these and many more use cases to see exactly what the Accelerator will do and how it will equitably create jobs, reduce emissions and lower energy costs.

By Jeffrey Schub

For over a decade CGC has held fast to these core principles to guide a clean energy transition:

• consumers should pay less, not more, for clean energy;
• every American should have clean energy and access to the financing necessary to get it; and
• public funds should mix with private as needed to provide that abundant, affordable finance.

The institutional embodiment of these principles is the green bank. And Congress is now closer to creating a massive version of a green bank than it has been since 2009. Outside Congress, the topic of clean energy finance is being taken up by a growing and diverse set of stakeholders.

Last week, Rewiring America released a remarkable and novel analysis that calculated precisely how many heat pumps, electric vehicles, miles of transmission line and other electrification-focused solutions are needed to decarbonize America. And it prominently described how the method and cost of financing are essential components of our nation’s climate strategy. “If done right, innovative low–cost financing will be the most effective way to ensure equity and universal access to cheap, reliable energy in the 21st century.” The report’s companion “Handbook” goes further to say:

When people talk about the total cost of solving climate change, it sounds enormous, often in the trillions. This is exactly the wrong way to approach it. We should think about how much money it will save us. We must ask ourselves the question, “What market conditions, and at what interest rate, can we make solving climate change save us money?” We must then write the regulations and build the institutions and policies that make that possible.

Thankfully, the institution needed to deliver this kind of finance has already been designed, it has been road tested globally and in America for a decade, and the bill to create it has already passed the House of Representatives with $20 billion of funding.

The National Climate Bank Act was introduced by Senators Markey and Van Hollen, and Rep. Debbie Dingell in 2019. And last month it was passed as part of the $1.5T Moving Forward Act with $20 billion of capitalization for the independent non-profit that what was renamed the Clean Energy and Sustainability Accelerator. It was endorsed in the House Climate Crisis Committee’s report and included in the Energy & Commerce Committee’s CLEAN Future Act climate package. It has the support of nearly 100 organizations, including environmental and clean energy leaders. And the non-profit national green bank has the support of 7 out of 10 voters nationally, including majorities of voters across parties.

The Reconstruction Finance Corporation (RFC) is often looked to as the model for what is necessary to build our clean energy future. However, the RFC hasn’t operated in over half a century, while green banks are operating right now, designed for the very crisis we are confronting. They are proving in real time precisely how to do it. 

In the U.S. green banks at the state and local level have financed more than $5 billion of clean energy and resilience projects, leveraging nearly $3 of private investment per public dollar. And every one of those projects saves money for the customer, and many were designed specifically for low-income communities. Globally, green banks have driven over $50 billion of investment.

As the Rewiring America report explains so well, merely saying something must be financed is not enough. The details matter, and we cannot wait until after the institution is formed to figure them out. Green banks are working as we speak to refine the precise techniques that will be deployed quickly at scale when the national green bank is launched.  We must use the green bank tools, built for this exact purpose, that are right in front of us.

By Coalition for Green Capital

By Lacey Shaver and Ryan Shea

“To make Solarize campaigns work for LMI residents, cities can develop partnerships with local green lending institutions (a Green Bank, community development financial institution or local credit union) to address cost and credit barriers. Connecticut’s version of Solarize, the Solar for All Campaign, offers a great example of using a financial partnership to expand the reach of a typical Solarize campaign to LMI residents.

After realizing that business as usual wasn’t spurring solar uptake in low-income communities, the Connecticut Green Bank created new incentives specifically for LMI residents, paired solar with energy efficiency upgrades, instituted “no money down, no credit required” Solarize offerings and recruited contractors with experience reaching underserved markets.

In three years, this multifaceted approach increased solar penetration in Connecticut’s low-income communities by 188 percent, and helped over 900 low-income households go solar.”

Read the full story.

By Coalition for Green Capital

By Geof Koss, E&E News reporter
Published: Wednesday, July 22, 2020

An assortment of interests are stepping up pressure on Capitol Hill to include assistance for struggling clean energy sectors in the upcoming COVID-19 relief package that lawmakers are hoping to enact in the coming weeks.

The new push — which includes industry groups, environmentalists, governors and major corporations — comes as the Trump administration and House and Senate lawmakers kicked off formal negotiations yesterday on a new phase of pandemic assistance that — like past talks — is focused more broadly on immediate economic and public health challenges (E&E Daily, July 21).

But advocates are pointing to the roughly 600,000 clean energy jobs lost since the pandemic hit in March to argue for assistance in the next phase.

A coalition that includes dozens of environmental and industry trade groups as well as state and local government officials today will send a letter to Senate leaders calling for the inclusion of $20 billion in the next pandemic bill for a nonprofit Clean Energy and Sustainability Accelerator that was passed by the House earlier this month as part of Democrats’ $1.5 trillion infrastructure package, H.R. 2.

“The opportunity to build the infrastructure to generate, move, store and use clean and efficient energy is nearly boundless,” said the letter, led by the Coalition for Green Capital.

Read the full story. 

By Coalition for Green Capital

FOR IMMEDIATE RELEASE
July 22, 2020
press@coalitionforgreencapital.com

After House Passage, Nearly 100 Groups Urge Senate to Add Clean Energy Jobs Accelerator in Recovery Package 

House provided $20B for nonprofit accelerator based on National Climate Bank concept

Clean energy industry has lost at least 600,000 jobs due to COVID19

WASHINGTON—Nearly 100 organizations today sent a letter to U.S. Senate leaders requesting they include $20 billion to start a clean energy jobs nonprofit accelerator in the economic relief package being crafted. With that funding and the nonprofit’s creation, 3 million jobs would be created. Last month, the U.S. House passed the accelerator and funding (based on the National Climate Bank Act) by a vote of 243-178.

With tens of millions of American jobs lost due to the COVID-19 pandemic so far—600,000 in the clean energy industry alone—and studies showing that up to 42 percent of those jobs will not return, the groups argue that Congress must urgently make long term investments that create jobs and build a cleaner future. 

“Throughout our nation’s history during times of immense challenge, we have taken bold action to build a better future for our country. Voters expect Congress to continue this tradition,” the groups wrote.

The letter, spearheaded by the Coalition for Green Capital, was signed by a diverse group of industry, trade and environmental advocacy groups, along with state and local officials. Large environmental organizations include the Sierra Club, Environmental Defense Fund, National Resources Defense Council, League of Conservation Voters, Union of Concerned Scientists, Climate Reality Project, and Appalachian Voices. 

Other key clean energy industry groups— Solar Energy Industries Association, Energy Storage Association, Vote Solar, and Advanced Energy Management Alliance—added their voices. 

State green banks and funding agencies, innovative start-ups and larger corporations, clean tech investors, utilities and regional advocacy groups—from Alaska to Hawaii, Florida to Michigan, Colorado to Pennsylvania and dozens more states—all signed on to support. Their support signals that this proposal is an effective way to put people to work and reduce greenhouse gas emissions.

The accelerator, as envisioned in S. 2057 Sens. Chris Van Hollen and Ed Markey, would use the green bank model to pair each public dollar with multiple private ones to build a range of clean energy projects throughout the U.S. This includes renewable power, building efficiency, grid infrastructure like transmission, industrial decarbonization, clean transportation, reforestation and climate-resilient infrastructure. Because the dollars are repaid over time, they can be recycled to make additional investments in the future. 

Twenty percent of the funds must go to low-income and climate-impacted communities, many of which have also been hard hit by the COVID-19 pandemic.

The groups added: “Immediate economic relief is essential in this crisis, but so too is providing a livelihood for the millions of American families and households out of work. Voters across parties want Congress to invest in clean energy job creation to put Americans back to work.”

Recent national polling shows eight out of 10 Americans want Congress to create clean energy jobs and seven out of 10 support depositing $35 billion into a fund to achieve this. The groups concluded: “Voters across parties want Congress to invest in clean energy job creation to put Americans back to work.”

Read the letter and full listing of groups that signed it below. 

The Honorable Mitch McConnell                     
Majority Leader of the Senate                                              

The Honorable Chuck Schumer                    
Minority Leader of the Senate                                   

United States Senate                 
Washington, DC 20510                                                                                             

Dear Leader McConnell and Minority Leader Schumer:

Last week, U.S. Treasury Sec. Steve Mnuchin asked Congress to pass additional economic relief, especially for industries that have seen significant job losses due to the COVID-19 pandemic. One of those is the clean power and transportation sector, which has already lost 600,000 good-paying jobs that support middle class families.

To get these workers and their families across the country back on their feet, and create millions more new clean energy jobs, we urge you to provide $20 billion for a nonprofit Clean Energy and Sustainability Accelerator. In June, the House included the nonprofit accelerator and funding when it passed the Moving Forward Act.

Throughout our nation’s history during times of immense challenge, we have taken bold action to build a better future for our country. Voters expect Congress to continue this tradition. In national polls, 4 out of 5 voters want Congress to invest in new jobs to build clean energy infrastructure, like wind turbines, solar panels, power lines, and electric vehicle charging. And 69 percent say the U.S. government should deposit as much as $35B into a nonprofit accelerator to achieve that goal.

The opportunity to build the infrastructure to generate, move, store and use clean and efficient energy is nearly boundless. Trillions of dollars of investment is needed to build clean energy infrastructure that will put millions back to work, strengthen communities, reduce pollution, improve public health, lower energy costs, and reduce greenhouse gas emissions.

The Clean Energy and Sustainability Accelerator—as envisioned by Sens. Markey and Van Hollen (S.2057) and Rep. Debbie Dingell (H.R.5416) in the National Climate Bank Act of 2019—is a common sense vehicle for this investment because it will pair each public dollar with multiple private ones to build a range of clean energy projects. These projects could include renewable power, building efficiency, grid infrastructure, industrial decarbonization, clean transportation, reforestation, and climate-resilient infrastructure. Every public dollar invested will be repaid by the Accelerator, which means dollars can be recycled to drive even more private investment in the future.

The nonprofit accelerator will use the green bank model that has been proven at the state and local level in the U.S. There are already successful green banks in states like Michigan, Florida, Connecticut and Hawaii, and new ones in place in Colorado, Ohio, and Nevada. These green banks have driven over $5 billion of investment into clean energy; for each public dollar invested, $2.60 of private investment has followed.

To strengthen communities in every corner of America, the nonprofit accelerator will fund the expansion of the existing green banks and help form new regional, state or local green banks across the U.S. This will build a network of local institutions designed expressly to meet the employment, energy, development and environmental needs of that community.

No community will be overlooked: At least 20 percent of the nonprofit accelerator’s investment must go to frontline, low-income and climate-impacted communities. Existing green banks have already proven the possible, delivering clean energy and health benefits to communities that have historically been left behind. This ensures good clean energy jobs are formed throughout the U.S., especially in areas that need them the most.

Immediate economic relief is essential in this crisis, but so too is providing a livelihood for the millions of American families and households out of work. Voters across parties want Congress to invest in clean energy job creation to put Americans back to work. Including and funding Clean Energy and Sustainability Accelerator will achieve this.

Sincerely,

Environmental Non-Profit Organizations

Appalachian Voices

Chesapeake Climate Action Network

The Climate Reality Project

Environmental Defense Fund

Fresh Energy

League of Conservation Voters

Maryland League of Conservation Voters

Natural Resources Defense Council

New Jersey League of Conservation Voters

Sierra Club

Union of Concerned Scientists

Vote Solar

Trade and Industry Associations

Advanced Energy Management Alliance

American Green Bank Consortium

Americans for a Clean Energy Grid

Coalition for Community Solar Access

Coalition for Green Capital

Energy Efficiency Alliance of New Jersey

Energy Storage Association

Fuel Cell and Hydrogen Energy Association

Keystone Energy Efficiency Alliance

Maryland Building Performance Association

Michigan Energy Efficiency Contractors Association

North Carolina Sustainable Energy Association

Northeast Clean Energy Council

Renewable Energy Alaska

Silicon Valley Leadership Group

Solar Energy Industries Association

Southern Renewable Energy Association

Funds and Community Development Financial Institutions

Atmos Bank

Climate Access Fund

Colorado Clean Energy Fund

Community Office for Resource Efficiency (CORE)

Connecticut Green Bank

DC Green Bank

Delaware Sustainable Energy Utility

Energy Resource Center, Colorado

Energy Outreach Colorado

Florida Solar Energy Loan Fund

Generate Capital

Greenworks Lending

Hawai’i Green Infrastructure Authority

Inclusive Property Capital

Maryland Clean Energy Center

Michigan Saves

Montgomery County Green Bank

Neighborhood Sun Benefit Corporation

New York City Energy Efficiency Corporation

Park City Community Foundation

Rhode Island Infrastructure Bank

Spark Northwest

Clean Energy Companies and Utilities

AboutSavingHeat.com

Ameresco

Amperon

Aris Energy Solutions, LLC

Atlas Home Energy Solutions

Bicky Corman Law PLLC

BlocPower

Build Efficiently, LLC

CertainSolar

Dollaride

eCAMION, USA

Elevation Lighting Services Company

Energy Efficiency Experts LLC

EnergyHub

The Engine

First Cast Communications

Form Energy

Green Generation

Greentown Labs

GRID Alternatives

Ground Loop Heating and Air Conditioning, Inc.

Hawaiian Electric

Hunt Consulting

Integro, LLC

Maalka

Main Street Launch

Mortenson

Mountain View Solar and Wind

PosiGen, Inc.

Powerhouse

Raise Green

Recurrent Innovative Solutions, LLC

RER Energy Group

Rivermoor Energy

Solar United Neighbors

Solstice

Sustainable Real Estate Solutions, Inc.

WexEnergy

Zinc8 Energy Solutions

State and Local Governments

Hawai’I State Energy Office

                                                                                   

cc:

The Honorable John Barrasso

The Honorable Tom Carper

The Honorable Chris Van Hollen

The Honorable Ed Markey

###

By Coalition for Green Capital

Sustainability is a tantalizing idea and a trendy buzzword. Who wouldn’t want to find a way to build, produce and consume more without causing damage to our land and its inhabitants?

But in practice, new ideas require so many trade-offs—and so much cooperation among public, private and nongovernmental players—that they often get stuck, especially at the federal level. Across a country with varied geography and regional economies, there are just too many competing industries, sectors and interests to find a way forward. So if you’re looking for innovation on sustainability, train your eye on states and cities.

A “green bank” that attracts private investment in sustainable projects

Read the full story.