The announcement yesterday that New York State's innovative, public New York Green Bank has made its first deals--$49 million worth--to provide loans to clean-energy companies might seem like small potatoes when it comes to financing contracts. Here on Wall Street's home turf, after all, we regularly hear about loans for hundreds of millions, if not billions of dollars.
But the truth is, this NYGB money,which will be paired with as much as $178 million in private capital, aren't just loans in themselves. They're the start of something big, something that aims to demonstrate the benefits of sourcing capital for clean energy projects to private lenders. In so doing, New York's Green Bank and others in states like California, Connecticut, Hawaii and Rhode Island have the potential to unleash the massive amounts of private cash we need to bring about a clean energy economy in New York and across the country, and to successfully combat the serious threat of climate change.
Unfortunately, many unseasoned lenders still consider the clean energy field too new and too untested to loan in. That fact is severely limiting states' and our country's ability to deploy clean energy fast. So New York, with NRDC's help, designed this path-breaking public financial institution, funded with ratepayer and other public dollars and staffed by seasoned investment professionals, to help reduce the risks private lenders currently perceive when considering clean energy investments. By supplementing private investment and providing services such as credit enhancements, warehousing loans until they reach scale and marketing to spur demand, the Green Bank can serve as a kind of training wheels, adding some supports that will make private lenders' forward movement in this area easier until they feel confident enough to propel themselves (and our state) forward on their own. NYGB's method is to partner with the private sector in innovative, replicable transactions that will speed the day when getting a loan for a rooftop solar system is as easy and as inexpensive as financing a new car.
The $49 million the NYGB has put up will be used to provide loans to three companies:
Long Island's Level Solar, which will use the money to help 6,000 homeowners go solar with no upfront costs;
Brooklyn's United Wind, to help install distributed wind energy projects for 160 residential, commercial and agricultural customers in central and western New York State; and,
Renew Financial, which will enable as many as 12,000 New York homeowners to borrow as much as $20,000 each at low rates for energy efficiency projects and other clean energy upgrades.
These transactions, all on their own, are expected to cut carbon emissions by 886,000 metric tons over their lifetimes. That's the equivalent of taking more than 14,000 cars off the roads. And that's not counting the synergistic effect that can result when these transactions show financial institutions the benefits of lending to clean energy companies.
These projects and the Green Bank itself are part of the Empire State's nation-leading and urgent push to cut our greenhouse emissions by 80 percent by 2050. That effort includes the state's Reforming the Energy Vision proceeding, designed to make New York's electric system cleaner, more affordable and more resilient; its $5 billion, 10-year Clean Energy Fund, which underwrites the New York-Sun Initiative, the Green Bank, and a host of energy efficiency and market-transformation programs; and, its $1.5 billion, 10-year Large-Scale Renewables program, to develop large solar and wind power projects in New York State.
These first loans are exciting first steps in New York's efforts to unleash private capital for clean energy projects. Those projects, in turn, can help stabilize our climate at the scale we need now, create good jobs and help everyone in New York breathe cleaner air. We look forward to their results and to many more clean energy projects to come.