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Green Banks Deliver Cheaper, Cleaner Energy for All

Energy Foundation made its first grant to Coalition for Green Capital in 2016.

Steve and Tanya Kennedy were paying higher-than-expected energy bills to heat their home in Berlin, Connecticut, and were dismayed to discover that the boiler was wrapped with asbestos. With an affordable, low-interest loan from the Connecticut Green Bank, they were able to remove the asbestos and replace the system with a new efficient boiler. They expect to save $1,800 annually on their energy costs. Others who benefit from the bank’s loans include an apartment complex for seniors and disabled residents and a lumber yard, both of which installed solar.

Steve Kennedy with the new boiler he and his wife Tanya installed in their home—thanks to an affordable, low-interest loan from Connecticut Green Bank.

Green banks ensure that clean energy projects get funded—especially those in underserved markets, where financing can be difficult to attract because traditional banks or credit unions view them as too risky, or charge high interest rates. Green banks don’t take deposits or operate like typical banks; rather, their mission is to mitigate climate change. Partnering with governments and public and private financing, they reduce risk and bring mission-driven resources to bear. According to the Colorado Energy Office, green banks in the U.S. already have collectively mobilized more than $2 billion worth of investments.

“The objective is to deliver cheaper, cleaner energy to everybody,” says Jeffrey Schub, Executive Director of the Coalition for Green Capital (CGC), an innovative nonprofit organization on the leading edge of green bank development

In fact, CGC was instrumental in establishing the Connecticut Green Bank—the nation’s first state-level green bank—by partnering with state government and public and private investors. CGC helped conceive of, design, advocate for, and implement the bank. Staff members also helped build broad support among industry and lawmakers, and ensured the bank would be funded with tens of millions of dollars per year. Additionally, the organization helped launch green banks in New York, Maryland, Colorado, and Nevada.

Financing can be transformative if you can unlock it for people. It can be a strong benefit for people shut out from traditional financing options. Green banks can reach these people.

Jill Bunting, Program Director, Coalition for Green Capital

Now CGC is in the midst of an exciting new project to establish a green bank in Cuyahoga County, Ohio—the first in the Midwest—perhaps by year’s end.

“This is noteworthy for several reasons,” Schub says. “We’ve never made any progress in heavy coal states. Historically, we’ve gone where there are more apparent pathways to success—up and down the coasts, not necessarily where the emissions are.”

Another groundbreaking aspect to the Cuyahoga County green bank is the partnership that has been “baked into” the process from the beginning.

Jeffrey Schub, Executive Director, Coalition for Green Capital

“What happens most often is that a government will come to us and say, ‘We want a green bank, but have no money and can’t pay you,’ so we scramble to take care of that,” says Schub. “In this case, we have a partnership between government and foundations right from the start—and that’s unique.”

The county contributed $50,000 to scope the project, and Energy Foundation funding partners George Gund Foundation and Cleveland Foundation contributed, as well.

John Mitterholzer, Gund Foundation’s Senior Program Officer for the Environment, says he saw Dan Adler, Energy Foundation’s Vice President, Policy, give a presentation on the Connecticut Green Bank—and he was hooked. Adler connected him to Schub and Bunting, who helped get the right people in the room.

“My hope is that this positions the county in a better way economically,” Mitterholzer said, “I want to see more clean energy deployed. It’s all about greenhouse gas mitigation to me. We have got to move faster and markets are slower than they need to be. How can we juice the markets? Can this green bank help accelerate progress? My hopeful answer is yes.”