Connecticut’s Green Bank Begins to Develop Innovative Programs to Leverage Private Sector Investment in Clean Energy
The Clean Energy Finance and Investment Authority (CEFIA) reported earlier this month that it had begun to develop several new clean energy financing programs. A main goal of CEFIA, Connecticut’s “green bank” which was created last year, is to transition the state’s clean energy programs away from grants, rebates and other subsidies toward low-cost financing of energy efficiency and renewable energy.
CEFIA partnered with the Connecticut Department of Energy and Environmental Protection, Connecticut Light & Power, the Clean Energy Finance Center, and other organizations to repurpose $8.25 million of federal economic stimulus funds to support two residential clean energy financing programs.
The two programs will use innovative financing, investment and insurance products to support residential use of clean energy. The new financing programs will support the installation of solar photovoltaic systems, solar thermal systems, and energy efficiency measures. Some of these funds will be used to make clean energy more accessible to low and middle income homeowners.
The Clean Energy Financial Innovation Program issued a $1.25 million request for proposals to attract private investment to respond to residential financing challenges. For example, this program will seek to use credit enhancements and other financing opportunities to encourage homeowners to implement clean energy measures. The program will also seek to provide loans to the low and middle income households that currently have difficulty accessing clean energy and energy efficiency opportunities because they cannot afford to pay the upfront costs.
The Residential Clean Energy Financing Program will support multiple programs. First, it will extend the Connecticut Solar Lease, a nationally recognized program which provides upfront capital to finance solar photovoltaic systems. Second, it will support a new financing program for solar thermal installations. Third, it will support “all fuels” energy efficiency measures for homes that heat with oil and propane, two fuels not covered through the state’s electric and natural gas utility programs.
This program will provide $7 million in credit enhancements to attract private capital investment. These enhancements may include loan loss reserves, interest rate buy-downs, and third-party insurance. CEFIA is meeting with local financial institution executives to discuss these investments. The executives have expressed interest in state investments that focus on subordinated debt, loan loss reserves, and Community Reinvestment Act credits.
Bryan Garcia, President of CEFIA, said that “CEFIA is pleased to have successfully repurposed a portion of State Energy Program funding from the American Recovery and Reinvestment Act. We look forward to continuing to work with the Connecticut Department of Energy and Environmental Protection to create residential clean energy financing products that attract private investment.”
The Clean Energy Finance Center (CEFC) helped bring the green bank concept to Connecticut in early 2011 and worked with the Coalition for Green Capital to build stakeholder support for the green bank. Currently, through a grant from the Rockefeller Brothers Fund, the CEFC is providing strategic and technical support to CEFIA to help it develop its residential and commercial financing programs.
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