Financing Growth in the Green Economy Remains a Local Endeavor

In the absence of a national green infrastructure bank that could provide financing for clean, renewable energy and energy-efficiency projects, individual states have stepped up to fill the gap and provide financial incentives and promote and facilitate investment. We discussed earlier in this blog how New York and New Jersey are rethinking energy finance and embracing green banks to support investment in renewable energy and distributed energy resources.

On June 30, 2015, Montgomery County, Maryland became the first local jurisdiction to create a green bank. In unanimously passing Bill 18-15, the Environmental Sustainability-Montgomery County Green Bank will provide “low–cost financing to increase residential and commercial solar, support energy efficiency improvements, and kick-start new green technologies.” According to the press release, the green bank is modeled after the successful Connecticut Green Bank and will be initially capitalized with $20 million made available by the recent settlement of the Pepco-Exelon merger.

The bill states that the bank, among other tasks, will: develop separate programs to support clean energy investment in residential, municipal, small business, and larger commercial projects; finance investment in clean energy technologies in accordance with a comprehensive plan developed by the bank to foster the growth, development, and commercialization of renewable energy sources and related enterprises; and stimulate the demand for clean energy and the deployment of clean energy technologies that serve end-use customers. Additionally, the bank is authorized to issue negotiable revenue bonds to finance clean energy technologies.

As efforts to establish a national solution, such as The Green Bank Act of 2014 H.R. 4522 (113th), fail to make any headway in Congress, the burden of addressing the nation’s clean energy challenges has fallen on the individual states and now local jurisdictions. In the near future, we anticipate that states and counties will closely watch Montgomery County’s bank in order to model and boost their own investment in green energy.