Connecticut’s U.S. senators are renewing their call for the creation of a federal green bank to grow clean energy and energy efficiency.
Democrats Chris Murphy and Richard Blumenthal joined leaders of the Connecticut Green Bank and area businesses at the Yale School of Management Wednesday for a roundtable on the Green Bank Act of 2016. Sponsored by Murphy, the bill would create a national green bank to use public money to attract private investments in clean energy and energy efficiency products. Murphy says Connecticut’s first-in-the-nation green bank that was created in 2011 can be the model.
“Our proposal is for a green bank that is initially capitalized by Treasury at $10 billion with a total capitalization of up to $50 billion,” Murphy said. “It would not hold loans itself, but it would partner with either state-based green banks or private lending institutions to feed money to them.”
Murphy says it would finance loans, insurance and other forms of risk management. Connecticut’s Green Bank has leveraged more than $800 million in clean energy business investments, created the equivalent of more than 3,000 jobs and reduced approximately 1.4 million tons of CO2 emissions. Jeff Schub, executive director of the Coalition for Green Capital, says roughly 15 state green banks have spurred nearly $2 billion of clean energy investments.
“The New York green bank, which was the second institution set up in the country, has animated about $500 to $600 million of total investment,” Schub said. “It’s about a five to one leverage ratio. It’s across residential, commercial efficiency, solar models and a distributed wind financing project.”
Brian Paganini is the vice president of Quantum BioPower, which plans to recycle 40,000 tons of food waste, create 1.2 megawatts of power, produce about 10,000 tons of compost and soil and displace about 5,000 tons of CO2 annually when it commissions a $12 million anaerobic digestion center in Southington. He says Connecticut’s Green Bank provided about 20 percent of the project’s cost with a low-interest loan.
“The cost of money outside of the Green Bank would’ve been more expensive for us and frankly there could have been an opportunity where we might not have been able to secure that financing,” said Paganini.
Murphy says 64 percent of new power generation in the first quarter of this year was solar and 33 percent was wind, figures he thinks make a case for a national green bank. Murphy also says the next president likely will pursue an infrastructure investment early on, which green efforts can be a part of. Therefore he says a national green bank will become a major issue in 2017.
“One out of the top 10 wind companies are in this country,” Murphy said. “One out of the top 10 solar companies and two out of the top 10 advanced battery companies are in the United States. That should scare us to death. Somebody is going to have all of these jobs. It might as well be us.”
Murphy and Blumenthal say small companies and business organizations like chambers of commerce that can benefit from the bank need to influence Republicans in order for the bill to gain traction.
“There have been some green banks that have been as successful so we’re going to have to tell the story of what works and what doesn’t,” Murphy said. “There are a lot of Republicans who want to support these private-partnerships. The downside is that there is nothing more politically charged today than the issue of climate change.”