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Financing Large-Scale Projects

Development and widespread implementation of carbon-reducing energy solutions at the level necessary to significantly reduce GHG emissions in the United States will require substantial capital investment. However, certain obstacles continue to hold back investment in carbon-reducing energy systems at utility-scale and consumer levels, including: (1) high up-front capital costs; (2) technology risk; (3) energy generation variability and integration costs; (4) tax incentive limitations; (5) location restrictions for consumer investors; (6) burdensome development and permitting time lines; and (7) inadequate transmission infrastructure. Policy changes at the federal, state, and local levels can be used to attract increased investment to carbon reducing energy solutions and create a dynamic clean energy economy while reducing negative impacts on the climate and environment. Some ways to overcome the challenges described above include: (1) tax incentives, carbon pricing, and financial innovation to reduce high up-front costs and attract a broader investor base; (2) financial protections to reduce risks associated with adopting new technology; (3) adaptable use of the electric grid to address energy generation variability; (4) virtual net metering and community solar to tap into investment from residential and commercial investors otherwise limited by the location and type of property they own or rent; (5) streamlined permitting processes to reduce risks associated with lengthy development time lines; and (6) investments in transmission infrastructure to best take advantage of lower no-carbon energy resources. The chapter provides an overview of the challenges to attracting capital to carbon-reducing energy projects and the corresponding pathways to overcome such challenges. These pathways will reduce investor risk and increase investor returns, paving the way for increased investment in the carbon-reducing energy systems that are essential to achieving the necessary levels of decarbonization.

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Resource Congress

Proposed American Clean Energy and Security Act of 2009

The American Clean Energy and Security Act of 2009 would have created a national green bank. It passed the House but failed in the Senate.
Example States and State Governments

Colorado Legislation for E-Bike, Diesel Truck Replacement, Electric School Buses, and Clean Air Grants

In June 2022, the Colorado legislature passed SB193, establishing grant programs for replacing diesel trucks ($15M), purchasing electric school buses ($65M), the purchase of E-Bikes ($12M), and a gene...
Resource Local Governments

Community Solar Policy Decision Matrix

The Coalition for Community Solar Access has authored a matrix intended to lead policymakers through important questions in the community solar development process, with factors grouped into five cate...
Example States and State Governments

Virginia Acts ch. 763 (2019)

Virginia’s Acts Ch. 763 (2019) required utilities to develop pilots in community solar and time-of-use rates.utility
Example Public Utilities

Burlington Commercial On-Bill Financing Program

The Burlington Electric Department’s Commercial On-Bill Financing Program offers an on-bill financing program for business customers. All projects that qualify for rebates and incentives under Burling...
Example States and State Governments

Hawaii’s GEM$ On Bill Program

Hawaii’s Act 204 (2011) directed the Public Service Commission to investigate the viability of an on-bill financing program. After one short-lived program, the Commission published a 2017 Decision (Or...
Resource Congress

The Inflation Reduction Act

New: The Sabin Center for Climate Change Law and Environmental Defense Fund are announcing the launch of an additional resource on the Inflation Reduction Act Tracker website: the IRA litigation case ...
Example Foreign

World Bank Green Bonds

The World Bank Green Bond raises funds from fixed income investors to support World Bank lending for eligible projects that seek to mitigate climate change or help affected people adapt to it. The pro...
Example States and State Governments

Vermont’s Proposed Climate Superfund Bill

This proposed 2024 bill imposes a one-time fee on major fossil fuel producers responsible for more than a billion metric tons of greenhouse gas pollution from 2000 through 2019. The funds collected th...
Resource Congress

Proposed Clean Energy Victory Bonds Act (2019)

This proposed 2019 legislation directs the Secretary of Treasury to work with the Secretary of Energy and the Secretary of Defense to establish Clean Energy Victory Bonds. Bonds would be available to ...
Example Local Governments

DC Green Bank

The District of Columbia Green Finance Authority Establishment Act of 2018 made Washington, DC the first city in the United States to establish a green bank. The DC Green Bank aims to attract private ...
Resource Congress

Proposed Financing Our Energy Future Act of 2019

The proposed Financing Our Energy Future Act of 2019 concerns Master Limited Partnerships (MLPs). An MLP is taxed as a partnership but ownership interests are traded like corporate stock on a market. ...
Resource Public Utilities

NRDC report, On-Bill Financing

NRDC’s 2013 report, On-Bill Financing: Overview and Key Considerations for Program Design, describes key benefits and challenges to consider when exploring an on-bill program.
Example Public Utilities

Kentucky How$martKY On-Bill Financing Program

The Mountain Association for Community Economic Development’s How$martKY On-Bill Financing Energy Efficiency Program organizes four rural utility cooperatives in Eastern Kentucky to provide energy ret...
Resource Congress

Proposed Green Bank Act of 2014

The proposed Green Bank Act of 2014 (HR 4522) would have established a Green Bank as a federally-owned independent corporation with a 20-year charter. It would have authorized an initial capitalizatio...
Example Public Utilities

New Jersey Natural Gas SAVEGREEN On-Bill Financing Program

New Jersey Natural Gas’ SAVEGREEN On-Bill Financing Program offers 0% APR on-bill repayment for eligible small to mid-sized commercial, industrial, and local governmental buildings in its service area...
Resource States and State Governments

Model Community Solar Legislation

The Coalition for Community Solar Access has authored two sets of model community solar legislation for vertically integrated states and restructured states.
Example States and State Governments

California’s Climate Catalyst Revolving Loan Fund

In June 2020, California passed AB78 to establish the Climate Catalyst Revolving Loan Fund to provide low-cost, low-interest finance to support eligible low carbon technology and infrastructure projec...
Example States and State Governments

New York’s Clean Water, Clean Energy, Green Jobs Environmental Bond Act

In the 2022 election, New York voters overwhelming voted in favor of the Clean Water, Clean Energy, Green Jobs Environmental Bond Act, or Proposition 1. The Act includes up to $1.5B for climate change...
Example States and State Governments

New Mexico’s Community Solar Act

In March 2021, New Mexico passed SB84, the Community Solar Act. The Act outlines the requirements for qualifications, ownership, administration, and rulemaking around community solar projects. Under t...
Example States and State Governments

Wisconsin Green Bank Exploratory Order

In April 2023, Wisconsin’s Governor signed EO 195, creating the Green Ribbon Commission on Clean Energy and Environmental Innovation to advise on establishing the Green Innovation Fund, which would be...
Example States and State Governments

Massachusetts’ Proposed Climate Superfund Bill

Massachusetts joined the group of states in 2024 proposing variations on a climate superfund bill, targeting $75 billion in damages for climate change from fossil fuel companies, to be spent on climat...
Resource States and State Governments

Report, States Should Spur Use of “Direct Pay” Tax Credits to Advance Clean Energy in Low-Income Communities

Seventy percent of the IRA’s $400 billion in climate investments is in the form of uncapped, direct pay tax credits, which are available through at least 2032. Beyond its scale, direct pay is unique i...
Resource Private Entities

The Climate Bonds Initiative and Market Reports

The Climate Bonds Initiative is an international investor-focused not-for profit working to mobilize the bond market for climate change solutions. They promote investment in projects and assets necess...
Example States and State Governments

Virginia’s HB 1184 (2020)

Virginia’s HB 1184 (2020) promotes the establishment of distributed renewable solar and other renewable energy by, among other measures, requiring the State Corporation Commission to establish by regu...
Resource Private Entities

International Carbon Markets Association: Green Bond Principles

The International Carbon Markets Association’s Green Bond Principles promote integrity in the Green Bond market through guidelines that recommend transparency, disclosure and reporting. They are inten...
Example States and State Governments

Maryland’s Climate Solutions Now Act (2022)

In March 2022, both houses of the Maryland legislature passed the Climate Solutions Now Act, which calls for Maryland to reduce GHG emissions by 60% (compared to a 2006 baseline) by 2031 and for the M...
Example States and State Governments

Connecticut Shared Clean Energy Facility Pilot Program

Connecticut’s Shared Clean Energy Facility Pilot Program was established in response to Public Act 15-113, as amended by Public Act 16-116, as a two-year initiative to support the development of SCEFs...
Resource Congress

Proposed Green Bank Act of 2016

The proposed Green Bank Act of 2016 (HR 5802) would have established a U.S. Green Bank that provides financial support to assist regional, state, and local institutions finance clean energy or energy ...
Example Executive Branch

USDA Energy Efficiency and Conservation Loan Program

The USDA’s Energy Efficiency and Conservation Loan Program provides direct loans to finance energy efficiency and conservation projects for commercial, industrial, and residential consumers in rural a...
Example Executive Branch

USDA Environmental Quality Incentives Program

USDA’s Environmental Quality Incentives Program provides agricultural producers with direct financing to pay for energy efficiency improvements.
Example States and State Governments

New Jersey Community Solar Energy Pilot

New Jersey’s A3723/S2314 (2018) mandates the creation of the Community Solar Energy Pilot Program. The New Jersey Board of Public Utilities adopted rules establishing the Community Solar Energy Pilot ...
Example Public Utilities

Southern California Edison’s Non-Residential On-Bill Financing Program

Southern California Edison’s Non-Residential On-Bill Financing Program offers qualified business customers 0% financing from $5,000 to $100,000 for qualifying projects. All government and institutiona...
Resource States and State Governments

Sabin Center’s Comparative Analysis of 2024 Climate Superfund Legislation

This March 2024 blog from the Sabin Center for Climate Change Law analyzes four recent climate superfund legislative proposals, compares them, and suggests legal challenges to their implementation.
Resource States and State Governments

NREL report: State Considerations for Designing Community Solar Policy

The National Renewable Energy Lab published a 2018 report on State Considerations for Designing Community Solar Policy analyzing the impacts of program caps, project size caps, subscriber location req...
Example Public Utilities

FPL SolarTogether

In March 2020, Florida Power & Light Company got approval from the Florida Public Service Commission to launch FPL SolarTogether, the largest community solar program in the country at the time of laun...
Resource Congress

Proposed National Green Bank Act of 2019

The proposed National Green Bank Act of 2019 would establish a U.S. Green Bank to finance climate change mitigation and adaptation projects at the state and local level by capitalizing regional, state...
Example Executive Branch

USDA Renewable Energy Systems and Energy Efficiency Improvement Loans and Grants Program

The USDA Renewable Energy Systems and Energy Efficiency Improvement Loans and Grants Program provides loan guarantees to rural businesses or agricultural producers for renewable energy systems or ener...
Resource Private Entities

Barclays report, Sustainable Investing and Bond Returns

Barclays report, Sustainable Investing and Bond Returns, studies the impact of environmental, social and corporate governance investing on credit portfolio performance.
Example Executive Branch

FHA PowerSaver Loan Program

The FHA’s PowerSaver Loan Program is a pilot mortgage insurance/ home improvement loan program from the Federal Housing Administration that enables homeowners to finance cost-effective, energy-saving ...
Resource Congress

Proposed Master Limited Partnerships Parity Act of 2015

The proposed Master Limited Partnerships Parity Act of 2015 would have expanded the definition of “qualified income” to include clean energy resources and infrastructure projects.
Example States and State Governments

New Hampshire’s Group Net Metering program

New Hampshire’s Group Net Metering program (2013) allows multiple customers to engage with a common, non-utility owned DG system up to 1 MW, using solar, wind, or certain other renewables defined by l...
Example States and State Governments

Alaska’s HB 374

HB 374, signed into law in 2018, enables utilities to offer customers on-bill financing agreements to finance measures such as renewable energy, energy efficiency, and energy storage devices. Also eli...
Resource States and State Governments

IREC Shared Renewables Resources

The Interstate Renewable Energy Council hosts a variety of resources related to shared renewables, including Model Rules for Shared Renewable Energy Programs, a National Shared Renewables Energy Score...
Example Public Utilities

SoCalGas Non-Residential On-Bill Financing Program

SoCalGas’ Non-Residential On-Bill Financing Program offers qualified business customers as well as multi-family residential owners 0% financing from $5,000 to $100,000 per meter for qualifying natural...
Example States and State Governments

Vermont’s Energy Loan Guarantee Program

The Energy Loan Guarantee Program, created by Act 87 in 2013, provides loan guarantees to financial institutions for loans made to businesses for energy efficiency improvements. It guarantees a maximu...
Example Executive Branch

Advanced Technology Vehicles Manufacturing Loan Program

The Advanced Technology Vehicles Manufacturing (ATVM) direct loan program was established in Section 136 of the Energy Independence and Security Act of 2007 to support the production of fuel-efficient...
Example Public Utilities

New York’s Community Distributed Generation program

New York’s Community Distributed Generation program (2015) allows multiple customers to engage with a common, non-utility-owned DG system up to 5 MW, using solar, wind, or certain other renewables def...
Example States and State Governments

California CLEEN Center

In 2014, California Green Bank legislation was introduced by Senator Kevin De Leon, and led to Governor Brown’s creation of the new California Lending for Energy and Environmental Needs (CLEEN) Center...
Resource States and State Governments

AFFORD Tool

The AFFORD tool (America’s Federal Funding Opportunities and Resources for Decarbonization) helps state, local, non-profit, and community organizations identify eligible funding, tax credits, and othe...
Model Law Congress

LPDD Model Law: Federal Green Private Activity Bonds Act

Generally, public entities may only issue tax-exempt bonds for governmental purposes. The Internal Revenue Code specifies certain limited categories of tax-exempt bonds that may be issued for private ...
Resource Private Entities

ELPC handbook on Community Wind Financing

The Environmental Law and Policy Center has prepared a handbook on Community Wind Financing, guiding project champions and developers through best practices on financing community wind projects, inclu...
Resource States and State Governments

Illinois’ Climate and Equitable Jobs Act

This 900-page energy and climate bill, passed in September 2021, covers a variety of subject areas, listed below: On electricity: The bill raises the renewable portfolio standard to require 40 percent...
Resource Public Utilities

ACEEE Report, On-Bill Financing for Energy Efficiency Improvements

ACEEE’s report, On-Bill Financing for Energy Efficiency Improvements, offers program profiles from across the country, and makes program and policy recommendations.
Resource Executive Branch

DOE report, Energy Investment Partnerships

DOE’s 2015 report, Energy Investment Partnerships: How State and Local Governments Are Engaging Private Capital to Drive Clean Energy Investment, provides a national survey of state and local Energy I...
Example States and State Governments

Colorado’s Community Solar program

Colorado’s Community Solar program (2011) allows multiple customers to engage with a common, utility- or non-utility-owned solar system up to 2 MW. Crediting is based on a total aggregate retail rate,...
Example States and State Governments

Hawaii Green Energy Market Securitization program

The Hawaii Green Infrastructure Authority was created by Act 211 in 2013. The Hawaii Green Energy Market Securitization (GEMS) Program was created by the Green Infrastructure Authority and other agenc...
Resource Private Entities

MIT Report, Solar Securitization

A 2016 MIT report, Solar Securitization: An Innovation in Clean Energy Finance, reviews the U.S. residential solar market, examines the mechanics of solar securitization, explores the potential tradeo...
Resource States and State Governments

NASEO report, The Role of Clean Energy Banks in Increasing Private Investment in Electric Vehicle Charging Infrastructure

The National Association of State Energy Officials and the Center for Climate and Energy Solutions published a 2014 report, The Role of Clean Energy Banks in Increasing Private Investment in Electric ...
Example Executive Branch

Fannie Mae Multifamily Green Financing Program

Fannie Mae’s Multifamily Green Financing Program provides mortgage financing to apartment buildings and cooperative for the retrofitting of U.S. rental housing stock to become more energy- and water-e...
Example States and State Governments

Maryland’s Proposed Climate Superfund Bill

Maryland’s proposed RENEW Act of 2024 — Responding to Emergency Needs from Extreme Weather — seeks to levy penalties on the 40 biggest emitters of greenhouse gases in Maryland over the past two decade...
Resource Congress

Proposed National Climate Bank Legislation of 2019-20

Senator Ed Markey introduced legislation calling for a National Climate Bank (S. 2057), a nonprofit institution independent of government, designed to reduce energy costs and leave consumers and busin...
Example Local Governments

Montgomery County, MD Green Bank

The Montgomery County Council unanimously passed Bill 18-15 in 2015, which called for the creation of an independent non-profit to serve as the County’s Green Bank. The Montgomery County Green Bank wa...
Resource Private Entities

Coalition for Community Solar Access

The Coalition for Community Solar Access is a national coalition of businesses and non-profits working to expand community solar. They work with customers, utilities, local stakeholders, and policymak...
Resource Private Entities

Windustry and Midwest Wind Energy Center

Windustry is a nonprofit organization working to advance community wind projects across the Midwest, developing information and tools for evaluating wind energy easement contracts, landowner options, ...
Resource Private Entities

NREL report, The Potential of Securitization in Solar PV Finance

A 2013 National Renewable Energy Labs report, The Potential of Securitization in Solar PV Finance, offers a high-level analysis of the immediate potential that securitization and access to the capital...
Resource Private Entities

Grid Alternatives

Grid Alternatives is a nonprofit organization that brings together community partners, volunteers, and job-trainees to install solar power and energy efficiency improvements for low income families. T...
Example States and State Governments

Minnesota’s Community Solar Garden program

Minnesota’s Community Solar Garden program (2014) allows multiple customers to engage with a common, utility- or non-utility owned solar system up to 1 MW. Crediting is based on a Value of Solar analy...
Example Executive Branch

DOE’s Innovation Energy Loan Guarantee Program

DOE’s Innovation Energy Loan Guarantee Program has nearly $22 billion available for loan guarantees to accelerate the commercial deployment of innovative energy technology. The U.S. Department of Ener...
Resource Local Governments

Annapolis, MD Clean Energy Loan Program

The Annapolis Clean Energy Program finances and encourages energy efficiency projects and renewable energy projects with an electric generating capacity of not more than one hundred kilowatts. On the ...
Example States and State Governments

California’s Self-Generation Incentive Program

Under California’s Self-Generation Incentive Program, electricity customers are awarded up to $5 million per project for generating electricity behind the meter using qualifying new or emerging distri...
Example States and State Governments

Connecticut Green Bank

Connecticut was the first state to establish a green bank pursuant to SB 1243, Pub. Act No. 11-80 (2011). Since its inception, the Connecticut Green Bank and its private investment partners have deplo...
Example States and State Governments

Hawaii’s Community-Based Renewable Energy Program

Act 100 (2015) established the Hawaii community-based renewable energy (CBRE) program, which generally envisioned electric utility customers participating with qualified projects in exchange for bill ...
Resource Congress

Proposed CLEAN Future Act (2020)

The proposed Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act (2020) is a large, economy-wide climate bill released by the House Committee on Energy and Commerce. Among ...
Example States and State Governments

Connecticut’s Green Liberty Bonds

In July 2020, the Connecticut Green Bank brought to market about $16 million in Green Liberty Bonds. The bonds will have a $1,000 face value, an uncommonly low denomination that is intended to make th...
Example Public Utilities

Vermont’s Group Net Metering program

Vermont’s Group Net Metering program (2009) allows multiple customers to engage with a common, non-utility owned DG system up to 500 kW, using solar, wind, or certain other renewables defined by law. ...
Example States and State Governments

Rhode Island Infrastructure Bank

The Rhode Island Infrastructure Bank was created in 2015 through bipartisan legislation. The legislation expanded the authority of the existing Clean Water Finance Authority to include the energy sect...
Example States and State Governments

New York Green Bank

New York’s Green Bank was established in 2013 pursuant to a Public Service Commission order. Its product offerings include warehousing and aggregation credit facilities, term loans and investments, cr...
Example States and State Governments

California’s Solar on Multifamily Affordable Housing Program

The SOMAH program will provide up to $100 million in rebates annually for the next decade to put solar on multifamily affordable housing in California, while allowing tenants to access the benefits. E...
Example States and State Governments

Massachusetts’ Neighborhood Net Metering and Community Shared Solar programs

Massachusetts’ Neighborhood Net Metering and Community Shared Solar programs (originally passed as part of An Act Relating to Green Communities, 2009) allows multiple customers to engage with a common...
Resource Private Entities

Coalition for Green Capital

The Coalition for Green Capital is a 501c3 non-profit, and a leading expert and implementer of Green Banks, with a decade of work around the world that has led to over $2 billion of clean energy inves...
Example States and State Governments

New York’s Climate Superfund Act

New York’s 2024 Climate Change Superfund Act establishes a climate change adaptation cost recovery program to require companies that have contributed significantly to the buildup of climate-warming gr...
Model Law Local Governments

LPDD Model Law: Green Bank State and Local Legislation

Green banks are independent nonprofit, public, or quasi-public financial institutions that leverage public or philanthropic dollars – and government backing – to attract private capital to zero and lo...
Resource Private Entities

The Solar Access to Public Capital’s Mock Securitization Project

The Solar Access to Public Capital’s Mock Securitization Project sought to model how rating agencies would need to evaluate a proposed asset-backed security transaction. The process provided valuable ...
Resource Congress

Proposed Green Bank Act of 2017

HR 2995 of 2017 would have established a U.S. Green Bank that provides financial support to assist regional, state, and local institutions finance clean energy or energy efficiency. It would have rece...
Example States and State Governments

Oregon’s SB 1547

Oregon’s SB 1547 boosted the state’s renewable energy mandate to 50 percent renewables by 2040. Section 28 of SB 1547 requires the Oregon Public Utility Commission to establish a program for the procu...