In his September State of the State address, New York Governor Andrew Cuomo announced a $1 billion initiative – The NY Green Bank. The idea behind the new bank (initiated with $165 million in state funds) is to get private investors to help make New York greener, create jobs, and ultimately lower costs for consumers (by providing more choices and value for their money). If it’s successful, private sector lenders (other banks!) will provide financial products (credit enhancement, loans, etc.) to clean energy projects that currently have a hard time securing financing–often either because commercial loan rates are too high or because the project is considered too small.
New York State already spends about $1.4 billion annually to incentivize clean energy. Yet the State is still not realizing its clean energy goals because 80% of that amount is disbursed in one-time-use subsidies for green energy companies like EarthKind Energy, United Wind, Environmental Advocates of New York, among others. While this funding helps enhance clean tech, it doesn’t position the state as a savvy investor. With the Green Bank model, as the Green Bank matures, the capital will be returned to the bank to be redeployed into new clean energy projects. As the market achieves scale this should reduce costs to develop even more clean energy projects. One result should be lower utility bills for consumers. Not a believer? Check the progress of the first state Green Bank (CT, 2011). Connecticut is investing $9.5 million in solar rooftops (with $40 million in private investment), which is actually lowering the price paid by residential consumers.