Energy Investment Partnerships, also known as Green Banks, function as a type of public-private partnership (PPP), leveraging limited public dollars to attract private capital to invest into clean energy projects that would otherwise be ignored by the private sector due to various barriers to entry. EIPs attract private capital to clean energy markets by offering credit enhancement mechanisms for private loans, co-lending with the private sector, or offering direct loans to borrowers underserved by conventional finance. An EIP’s flexibility to respond to rapidly changing market conditions has made them a compelling option for states looking to increase private investment in clean energy, leading to the creation of various forms of EIPs in Connecticut, New York, Rhode Island, Hawaii, Colorado, and other states and localities across the country.
State Energy Offices can influence the development and actions of EIPs. The Offices are usually directly involved in establishing the EIPs through conducting market research, engaging with stakeholders, and laying the groundwork necessary so that an EIP can quickly establish itself and begin operating in clean energy markets, making them integral to their creation. For example, in New York, the State Energy Office (NYSERDA) founded and currently houses the New York Green Bank (NYGB), and the Colorado and Missouri Energy Offices have been instrumental in creating the business models for EIPs in their states. As entities that help drive policy in a state, the State Energy Offices also often take a leadership role in the development and direction of EIPs through membership on those entities’ Boards of Directors, which influence the markets an EIP targets and the products it offers to meet those markets’ needs. They also provide additional guidance and support to the EIP through providing information about its products to contractors and lenders on their websites.
- Coalition for Green Capital’s Green Bank Resource Page
Description: The Coalition for Green Capital (CGC) has produced a number of reports about EIPs/Green Banks over the past several years. Their resources page offers a number of reports presentations discussing various aspects of Green Banks, from Green Banks 101 to specific topics, including legislation structures and options, and Green Bank product and activity overviews.
- DOE’s 2015 Report: Energy Investment Partnerships: How State and Local Governments are Engaging Private Capital to Drive Clean Energy Investments
Key Findings: EIPs can successfully operate under a variety of operating structures and generate savings and impacts beyond traditional financing programs. While financial product offerings and target markets vary among EIPs, their ability to offer a variety of financing approaches within their organizational limits helps them to address the myriad needs to private investors and property owners looking to implement clean energy projects.