By Steve Rizer
What will be the nationwide impact, if any, of the New York Green Bank, a bank that opened for business earlier this month with a partial mission of stimulating private financing of energy-efficiency projects? Well, there is at least one prediction that the bank -- believed to be the largest of its kind in America -- will have an influence well beyond the state’s borders. The prediction comes from Douglass Sims, senior policy analyst at the Natural Resource Defense Council’s Center for Market Innovation, who reported that his organization expects the bank to “set a national and international precedent for smart climate investment.” Will it?
“NY Green Bank” is a state-sponsored investment fund whose stated goal is to “overcome current obstacles in clean energy financing markets and increase overall capital availability through various forms of financial support such as credit enhancement, project aggregation, and securitization. By collaborating with the private sector, the bank will leverage its funds with private capital to facilitate the transition to New York State’s clean energy future.”
NY Green Bank is not a conventional bank, as it will not accept deposits or, as a general rule, offer loans or financing directly to consumers. Instead, it will partner with financial institutions and industry participants such as energy-service companies, developers, and equipment manufacturers to support “economically viable” clean-energy projects. In most cases, the bank will invest alongside other capital providers and industry participants that deal directly with end-use customers. Projects to be supported by the NY Green Bank can involve commercial, industrial, and residential energy-efficiency measures; electricity load reduction; technologies for generating energy from solar, wind, and other renewable resources; onsite clean generation; and similar projects that can support the state’s clean energy objectives.
Last December, Gov. Andrew Cuomo (D) announced the initial capitalization of $210 million for the NY Green Bank, including $165 million redirected from other clean-energy programs by the New York State Public Service Commission and $45 million from the Regional Greenhouse Gas Initiative. This was the first step in capitalizing the $1-billion NY Green Bank initiative announced by Cuomo during his 2013 State of the State address.
The ConstructionPro Network member version of this article includes statistical projections of the amount of business the bank may be able to generate over the next 20 years and coverage of other recent developments involving energy efficiency.