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November 4, 2021

Earning major bipartisan support, a federal green bank could be nation’s best bet for large-scale renewable energy deployment

By Elana Knopp, Senior Content Writer

Edison Energy’s Visionary Voices: Perspectives in Energy Series features conversations with leading experts from across the industry. These thought leaders are driving innovation in energy markets and available solutions for commercial, industrial and institutional energy buyers. Their diverse perspectives and experience offer a real-time view into the transformation happening in the market today.

Alex Kragie is the Director of the American Green Bank Consortium, a project of the Coalition for Green Capital. The Consortium is a membership organization composed of 21 green banks from across the US. Previously, Alex was the Acting Executive Director of the Montgomery County Green Bank, the nation’s first county-level green bank. He has also led work on a number of other Coalition for Green Capital initiatives.


Despite substantial headwinds caused by the COVID-19 pandemic, last year was a banner year for U.S. green banks, which mobilized $1.69 billion of total investment with $442 million of green bank funds. The momentum has continued well into 2021, with even more progress made to establish a national network of well-capitalized green banks. To date, cumulative green bank investment has driven $7 billion in clean energy investments into new markets.

A green bank uses public capital to mobilize more private investment into underserved green and resilient financing markets to fill market gaps, with the ultimate goal of enabling private capital partners to enter clean energy markets at scale without green bank assistance.

The number of green banks has grown exponentially since the first opened its doors in Connecticut in 2011. There are now 22 green banks in 16 states and the District of Columbia, with 22 more in the pipeline.

Now, the green financing model could go national. Earlier this year, Sen. Chris Van Hollen (D-MD), Sen. Ed Markey (D-MA), and Rep. Debbie Dingell (D-MI), introduced legislation to create a national green bank. The green bank, called the Clean Energy and Sustainability Accelerator, would serve as an independent, nonpartisan nonprofit finance entity that would operate as the U.S. federal green bank, using public funds to mobilize more private investment to accelerate deployment of clean and resilient infrastructure in every community across the nation.

The Accelerator would leverage $100 billion to create $463 billion in public and private investment within four years, with the requirement to invest 40 percent of funds in disadvantaged communities. The investment would also create four million American jobs.

The policy has bipartisan support in the House, where it has passed three times, and could be included in broader legislation that passes Congress as soon as this fall.

Critically, President Biden has endorsed the creation of the Accelerator as part of his American Jobs Plan, while it has also earned support from a wide range of businesses, capital providers, environmental organizations, advocates, trade groups, and utilities.

In a New York Times opinion piece published last week, BlackRock CEO Larry Fink called on the international community to reimagine climate finance and how economies can work toward achieving net-zero emissions by 2050, citing green banks as a proven method to leverage public-private capital.

“There’s a recognition that public funds can be used in a strategic way to drive as much overall investment as possible into these markets,” said Alex Kragie, director of the American Green Bank Consortium. “Green banks are not in the business of competing with private capital. Instead, we blaze the trail and go in places where private capital isn’t flowing for one reason or another. It’s a very common-sense approach to how you would want to use public funds when the scope of the challenge is so large.”

Last month, the House Committee on Energy and Commerce completed its markup of the budget resolution, with the legislative language expected to permit the funding of a federal green bank.

“The long story short is that the model works,” said Kragie. “It’s been proven out over the last decade. We’ve demonstrated that by using public funds to drive investment into underserved markets, whether that be technology or socioeconomic, the green bank model has proven itself. And the ability to use public money to attract and leverage private capital is an absolutely key element of our success.”

Kragie referenced a landmark report recently published by researchers at Princeton University, which shows that a $2.5 trillion investment above business as usual in the next 10 years will be necessary to reach a net-zero economy by 2050.

The study’s five scenarios describe at a state-by-state level the scale and pace of technology and capital mobilization needed across the country, highlighting the need for more wind and solar power, expanded electricity transmission systems, and increased electrification of buildings and cars.

“You want to be smart in terms of how you’re investing public dollars and doing so in a way that pulls as much private capital as possible along with it,” Kragie said. “For every public dollar thus far, three dollars in private capital has gone along with it for investment in clean energy, energy efficiency and resiliency projects. The model works. People have seen that, and they want to reap the benefits for folks that live in their jurisdiction. These benefits include job creation, bill savings for the customers who end up getting clean energy upgrades, and they include a reduction in pollutants and greenhouse gas emissions as well.”

In a letter sent to congressional leaders earlier this year urging action on climate infrastructure, nearly 150 mayors — a group known as “Climate Mayors” — called for the creation of a national green bank.

“You have a lot of local and state leaders that have to deal with the climate consequences of what the Accelerator is trying to solve,” Kragie said. “The Accelerator is the logical next step to scale up investment through green banks. What that tells you is that it’s the people on the front lines–the residents who are not breathing clean air, the flooding that must get cleaned up, the emergency work that must be done in advance of and in the wake of storms–that are reporting back that we need to drive this investment forward and deploy these technologies so we can stave off the worst effects of climate change. And importantly, let’s get people to work while doing it.”

This summer, 10 governors on the front lines of the climate crisis called on Congress to pass the Accelerator, naming it “one of the most impactful actions to protect our climate.”

The governors are urging Congress to establish the Accelerator to mobilize private investment across distributed energy resources; retrofits of residential, commercial, and municipal buildings; and clean transportation.

“As people have seen the green bank model work over the past decade, they’ve raised their hand and said, ‘Yes, we’d like to be a part of this,’’’ Kragie said. “New Orleans just rolled out a green mortgage product that brings resilience measures into homeowners’ mortgages. This is not theoretical, so the very real driver for demand for these services is what’s happening around the country. You have Louisiana and Mississippi devastated by Hurricane Ida, which also inundated large parts of the Mid-Atlantic and Northeast, you have wildfires burning out in the west. This is not a drill anymore. To be frank, we don’t have the time. We have a literal burning platform in terms of the consequences of climate change, and we have extensive proof of concept of success on the ground.”

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