GREEN BANKS IN THE UNITED STATES

2020 US GREEN BANK ANNUAL INDUSTRY REPORT

@agbconsortium @cgreencapital Table of Contents

PUT AMERICANS BACK TO WORK 3

WHAT IS A GREEN BANK? 4

WHAT PROBLEMS DO GREEN BANKS SOLVE? 4

A CLEAN ENERGY JOBS FUND 5

GREEN BANKS AT A GLANCE IN 2019 7

SPECIAL SECTION: GREEN BANKS IN A TIME OF CRISIS 11

SPOTLIGHT ON 2019 GREEN BANK ACTIVITY 12

LOOKING AHEAD FOR GREEN BANKS 18

APPENDIX: METHODOLOGY 23

The 2019 US Green Bank Annual Industry Report is produced by the American Green Bank Consortium, a project of the Coalition for Green Capital. The American Green Bank Consortium is a membership organization for green banks, capital providers, developers and other clean energy supporters to work together to expand and accelerate innovative clean energy investment across the United States.

2020 ANNUAL INDUSTRY REPORT 2 Put Americans Back to Work More than 40 million Americans so far have filed Each project financed by the Fund will require for unemployment as a result of the COVID-19 Americans with all kinds of skillsets and pandemic and ensuing economic shutdown. The backgrounds, not just contractors and engineers. shutdown, new consumer habits and changed Today, half the jobs in the clean energy sector are behavior due to COVID-19 have led to structural in sales, administration and management. These changes in the U.S. economy and its workforce. That are roles that can be filled quickly by those laid off means it is essential for Congress to help create from other sectors like and travel. new jobs for Americans. Strengthening Communities A recent national poll showed that 4 out of 5 voters To strengthen communities in every corner of want Congress to invest in new jobs that build America, the Fund will help form regional, state and clean energy infrastructure, such as wind turbines, local green banks across the U.S. and provide the solar panels, power lines, and EV charging. And 7 funds necessary for them to invest. This will build a out of 10 voters say the U.S. government should network of local institutions designed to meet the deposit $35B in the nonpartisan, nonprofit Clean employment, energy, and environmental needs of Energy Jobs Fund, as envisioned in the National that community. The Fund will also help fund the Climate Bank Act of 2019, to achieve that objective. expansion of those green banks that already exist The opportunity to build infrastructure to generate, and are showing others how to lead the way. move, store, and use clean and efficient energy is immense. Trillions of dollars of investment are No community will be overlooked. Twenty percent needed to build clean energy infrastructure that of the Fund’s investment must go to frontline, will put millions back to work, reduce pollution, low-income, and climate-impacted communities, improve public health, lower energy costs, and as envisioned in the National Climate Bank Act reduce greenhouse gas emissions. The Clean of 2019. Existing green banks have proven this to Energy Jobs Fund is also a great complement to be possible, delivering clean energy and health other clean energy legislative proposals such benefits to those who historically have been left as extension of the Investment Tax or a behind. This means clean energy jobs will be Standard. formed throughout the U.S. The Clean Energy Jobs Fund Moving Forward with Bipartisan Support The Clean Energy Jobs Fund (as envisioned in the The Fund is the evolution of the Clean Energy National Climate Bank Act of 2019 by Rep. Debbie Deployment Administration (CEDA), introduced in Dingell (H.R.5416) and Sens. Markey and Van Hollen Congress in 2009. CEDA enjoyed broad bipartisan (S.2057)) is the best vehicle for this investment support, passing the House Energy & Commerce because it will pair each public dollar with multiple Committee with a 51-6 vote and then the entire private ones to build a range of projects. Each House. The bill also passed the Senate Energy public dollar offered as financing is repaid and & Natural Resources Committee with a 15-8 preserved by the Fund, which means dollars can bipartisan vote. be recycled to cause even more private investment This popular broad support still exists today. Voters in the future. The Fund will use the green bank across parties want Congress to invest in clean model that has been proven at the state and local energy job creation to put Americans back to work. level in the United States. Green banks have driven That is why Congress should create the Clean over $5 billion of investment into clean energy Energy Jobs Fund today. infrastructure, and for each public dollar invested, $3.60 of total investment is caused.

2020 ANNUAL INDUSTRY REPORT 3 What is a Green Bank? Green banks are dedicated finance institutions and lack of private investment slow the adoption (often public entities or nonprofits) that use of clean energy and related technologies. By using innovative financing to connect clean energy, various tools like credit enhancements and long- resilience and climate-related projects with capital. term , green banks mobilize private investment Green banks are not literal banks, because they into those otherwise unbuilt projects and prove what do not take deposits. Rather, green banks are is possible. This, in turn, can unlock massive market specialty investment funds that provide capital expansion. Green banks are not meant to compete in partnership with the private sector to build with private capital where it is already flowing. a range of projects that otherwise could not be Instead, green banks expand the pie of the financing completed. And with that construction comes local market for projects across the country, allowing job creation, lower energy costs, increased public more private investment to flow where it otherwise health, climate resilience and reduced greenhouse wouldn’t. To date, green banks have financed tens of gas emissions. Green banks typically focus on thousands of projects that reduce carbon emissions underserved markets, where perceived barriers and create jobs in their communities.

What Problems do Green Banks solve? The United States is currently facing the country’s investment of $225 billion per year - and this is greatest unemployment crisis since the Great only taking into account the power grid, never mind Depression. As of the publication of this report, other sectors of the economy that will need to be over forty million Americans have filed for decarbonized. However, in the US in 2019, only $78 unemployment since the COVID-19 pandemic hit billion of new investment flowed into clean energy. the United States. A Clean Energy Jobs Fund, as envisioned in the National Climate Bank Act of Worldwide, the picture is even less promising. 2019, could create 5 million jobs to build clean Global new investment in renewables was flat from energy infrastructure. The Clean Energy Jobs Fund 2018-2019, with $363b in total new investment will mobilize hundreds of billions of dollars of in clean energy globally in 2019. Total global public and private investment in a range of clean investment numbers are slightly above what is energy projects. This investment will put Americans required to decarbonize only the US electric grid, back to work. certainly not anywhere approaching the level of investment needed to turn the tide in the battle Beyond the current economic crisis raging in against climate change. And none of these numbers America, another massive crisis looms: the climate take into account the cratering effect of the current crisis. In order to turn the tide in the battle against global pandemic on clean energy markets. Growth climate change, enormous levels of investment in in new investment in a clean power platform a new clean power platform need to occur across simply isn’t close to where it needs to be, here in the globe. In the United States alone, the cost of the US or around the world, and clearly something transitioning to a 100% clean energy electric grid needs to be done about this. over 20 years would require an annual average new

2020 ANNUAL INDUSTRY REPORT 4 A Clean Energy Jobs Fund The proposed Clean Energy Jobs Fund, as The CEJF aims at maximizing job creation per public envisioned in the National Climate Bank Act, dollar invested, as long as investments meet three is a non-profit corporation independent of conditions: government whose mission is to invest in projects that create jobs while mitigating the impacts of 1. Mitigate the environmental impacts of carbon- climate change. It is nonpartisan and will have a related economic activity through greenhouse gas bipartisan board of directors. emissions reduction or increased climate resilience.”

The Fund will be allocated $35 billion of capital 2. Not harm communities, households and by the federal government, with any residual businesses impacted by investments; and where capital after 30 years of authorized operation possible make them better off. returned to the government. Its debt is not 3. Have a broad portfolio of risk-adjusted guaranteed by the government. investments, with at least 20% of the portfolio made of investments that benefit low-income, minority, underserved, frontline and/or just transition communities.

7 out of 10 voters want Congress to deposit $35B in nonprofit, nonpartisan Clean Energy Jobs Fund

Do you think the US government should pass a law that deposits $35 billion in a nonpartisan nonprofit fund that would create five million new jobs in clean energy? This plan would ensure that consumers pay the same or less for electricity than we pay today.

Voters Nationally

All 69% 15%

Democrats 83% 3%

Independents 58% 18%

Republicans 57% 26%

Yes Don’t Know No

20202020 ANNUALANNUAL INDUSTRYINDUSTRY REPORTREPORT 55 Within these conditions and targeting the objective industrial decarbonization; (5) grid infrastructure, function, the Clean Energy Jobs Fund then seeks including transmission, distribution and storage; to maximize private sector co-investment, or (6) sustainable agriculture, including reforestation, leverage, that comes alongside the Fund’s public afforestation and regenerative agriculture; and (7) investment. The investments must be in one of climate-resilient infrastructure. these seven defined areas, which include: (1) renewable power generation, including solar, wind, The Fund will help create, invest in and partner geothermal, hydropower, ocean and hydrokinetic, with green banks at the regional, state and and fuel cells; (2) building efficiency, fuel-switching local level to support smaller, community-scale and electrification; (3) clean transportation, investments. It will also be authorized to invest including electric vehicles, hydrogen vehicles and directly in projects of national or regional scale. associated charging or fueling infrastructure; (4)

2020 ANNUAL INDUSTRY REPORT 6 Green Banks at a Glance in 2019 Green banks in the United States had their strongest year ever in 2019. Green banks caused $1.48 billion in total investment, pushing green bank total investment caused over $5 billion since 2011.

Cumulative Green Bank Impact through December 31, 2019

Total Investment Caused $5.3 b Total Green Bank Investment $1.5 b Total Private Co-Investment $3.8 b Mobilization Ratio (Overall Project Investment/Green Bank Investment) 3.6 to 1

Investment Caused by Green Banks

2020 ANNUAL INDUSTRY REPORT 7 Increase in Earned Revenue Green banks in the United States collected parties (i.e. Regional Greenhouse Gas Initiative funds $55.9 million in earned revenue to support their or systems benefit charges). This ramp-up reflects an operations in 2019, a 22% increase over 2018’s $46.0 industry-wide focus on the importance of financial million in earned revenue and a 141% increase self-sustainability for green banks in the US, which is from 2017’s $23.2 million in earned revenue. Earned a recognition of the risks of relying solely on public revenue is revenue generated as a result of the funding revenue streams which can be vulnerable to organization’s operating activities, as opposed to changing political dynamics. other non-operating funding streams from third

2020 ANNUAL INDUSTRY REPORT 8 A Snapshot of Green Bank Investment by Sector

The American Green Bank Consortium performed reader a good idea of where the highest-profile an analysis of US Green Bank investment across Green Bank investments are occurring across the $675m of publicly profiled projects made available country. Community solar projects are the largest through the green banks themselves. While this is category of projects profiled, but the investment is not a representative sample of the $5 billion plus spread across sectors including energy efficiency of total projects financed overall, it can give the and clean energy generation.

Green Bank Investment in Publicly Profiled Projects

Multifamily Energy Efficiency Projects 6%

Multifamily Clean Electricity 1%

Commercial Commercial Energy Clean Efficiency 4% Electricity 10% Public & Nonprofit Energy Efficiency 19% Large Commercial Clean Electricity Public & Nonprofit 20% Clean Electricity 6%

Community Solar 34%

2020 ANNUAL INDUSTRY REPORT 9 Total Asset Growth The total assets of green banks have grown in total assets on green banks’ balance sheets significantly in the previous three years as more shows the growth that these organizations can US-based green banks came online and began to achieve, even in a time of little to no availability make an impact in their communities. The increase of public money.

Selected Individual Green Bank Financial Highlights

The Hawaii Green Infrastructure 1 3 The Connecticut Green Bank Authority increased its earned has increased its earned revenue total by $2.97m revenue by 382% since 2017 between 2017 and 2019, allowing it to generate enough The Florida Solar & Energy 4 earned revenue to cover its Fund primarily serves costs for the first time in 2019 low- and moderate-income households in Florida, and In 2019, Michigan Saves caused has a less than 1.5% 2 174% more private investment rate on their while than in 2017 while only saving its borrowers an increasing public dollars at risk average of 26% on their by 19%, reflecting a growth in energy bills overall mobilization ratio from 13:1 to 18:1

2020 ANNUAL INDUSTRY REPORT 10 2020 ANNUAL INDUSTRY REPORT 10 Special Section: Green banks in a time of crisis State and local green banks are mission-driven Green Infrastructure Authority, the Colorado organizations focused on creating jobs and Clean Energy Fund, and the Maryland Clean reducing greenhouse gas emissions through Energy Center connected their contractors with investment. But as community-based organizations, a technical assistance webinar hosted by the they often see their mandate as broader than Coalition for Green Capital on the program. simply reducing emissions. This is why, as the COVID-19 pandemic swept through the country, • Preparing for what comes next: Green banks green banks have launched efforts to support their have been working hard to collect data from communities in new ways. This section takes stock their lender and contractor partners, as well as of what some green banks have done to support their borrowers, that will enable them to offer their communities during the COVID-19 crisis. the right types of solutions to problems that are bubbling up in their respective markets. • Repayment flexibility: Green banks across the The Connecticut Green Bank and NY Green country hurried to support their borrowers Bank have collected extensive data from their and contractors during the unprecedented contractors to better enable the organizations’ economic shock of 2020. All green banks in the proactive response to the pandemic to be US have sought to offer relief for borrowers useful and help soft spots in the market that during the economic shock induced by the most need the assistance. This data, and other COVID-19 crisis. Borrowers have been offered data collected through other green banks, will deferments on their loan payments from 3 allow green banks to be particularly effective months to 6 months, with no interest accruing frontline responders to the economic crisis that during the deferment period. The Hawaii Green is gripping their communities. The Montgomery Infrastructure Authority partnered with Hawaiian County Green Bank developed a specialized loan Electric, the major utility in the state, to offer up product for small businesses that fills a funding to six months of deferment for borrowers that gap when utility funds ended so businesses utilized the Green Energy Money Saver (GEM$) could continue to undertake energy savings on-bill financing program. The City improvements, and the MC Green Bank altered its Energy Efficiency Corporation (NYCEEC) waived residential loan product to help contractors and pre-payment penalties for certain commercial homeowners with lower fees and interest rates. borrowers looking to pay off their loans where the borrowers faced unusual challenges. • Other forms of community assistance: Green banks have scrambled from the early stages • Guidance for contractors on Paycheck Protection of the pandemic to find ways to be support Program (PPP): All green banks played a role in mechanisms for the communities that they live providing guidance to contractors that they work in. The Connecticut Green Bank organized a with on accessing loans under the Paycheck mask drive in which their contractors donated Protection Program, administered by the Small N-95 masks for use at local hospitals. The Business Administration. The Connecticut Florida Solar & Energy Loan Fund has organized Green Bank provided an entire resource center a Solidarity Fund that will allow for additional to its contractors looking to apply for the resources to be offered to communities mostly forgivable loan to support job retention especially hard-hit by the pandemic. around the country. Michigan Saves, the Montgomery County Green Bank, the Hawaii

2020 ANNUAL INDUSTRY REPORT 11 Spotlight on 2019 Green Bank Activity

CALIFORNIA ALTERNATIVE ENERGY AND CLIMATE ACCESS FUND ADVANCED TRANSPORTATION FINANCING www.climateaccessfund.org AUTHORITY (CAEATFA) The Climate Access Fund (CAF) is a nonprofit green www.gogreenfinancing.com bank focused on increasing low-income access to In 2019, CAEATFA assisted nearly 300 projects. the benefits of clean energy through Maryland’s The Hub for Energy Efficiency Financing, which Community Solar Pilot Program. 2019 was a year of leverages private capital investment to broaden growth and capacity building for the Climate Access access to capital for energy efficiency retrofits Fund. CAF received its 501(c)(3) status from the IRS, across multiple sectors, had a breakthrough year. secured $600,000 in operating funds, and identified The residential program enrolled over 270 home $1.3 million in low-cost debt. In partnership with energy efficiency projects and supported $4.65 the Montgomery County Green Bank and four other million in private capital financing with $750,000 nonprofit organizations, CAF formed the Solar in credit enhancement. 55% of these projects Democracy and Equity Collaborative to strengthen were in low- and moderate-income census tracts. the advancement of low-income access to solar The program reached its $10 million milestone, power in Maryland by working together. CAF enrolling 47% of its total portfolio in 2019 expanded its partnerships with solar developers (launched in 2015). Since its inception, the Program and led a working group of the Maryland Public has enrolled 7 lenders, nearly 400 contractors Service Commission that resulted in significant serving 51 counties across the state, financing improvements to the subscription process for low- $10.4 million of private capital across 612 projects. income households. Finally, in 2019 CAF expanded The Hub small business pilot was launched in its pipeline of potential low-income community solar 2019 and established a project portal to simplify projects and is looking forward to deploying its debt transactions for contractors, project developers and and guaranty capital in innovative ways in 2020 for lenders. In the first year, three finance companies the benefit of low-income households in Maryland. enrolled in the Program, funding three projects valued at $440,000 for small businesses in COLORADO CLEAN ENERGY FUND the agriculture and sales industries located in www.cocleanenergyfund.com California’s Central Valley. The Hub’s affordable multifamily pilot was also launched in 2019 and The Colorado Clean Energy Fund (CCEF) officially its first lender was enrolled in the program, with launched its operations in 2019 and successfully anticipation of it first financing in 2020. CAEATFA completed its startup activities, thus meeting its also introduced gogreenfinancing.com, a website organizational goals for the year. Working with the for California consumers. Coalition for Green Capital (CGC), CCEF secured operating capital that will support its 2019/2020 In 2019, CAEATFA provided $24 million of tax operations. CCEF also applied for and received benefits (exclusion of sales tax) to support its 501(c)(3) status from the IRS and formed and investments in machinery and equipment for 14 convened its Board of Directors, thus completing recycling, biofuel (dairies, bio waste, wastewater) its formation process and governance structure. and zero emission vehicle and aviation Lastly, CCEF originated its first transaction, which transportation. In addition, in 2019, the $10 million closed in May 2020, and completed its business plan PACE Loss Reserve -- which supports residential that identifies the product lines and accompanying PACE projects -- enrolled an additional 12,173 revenue models that CCEF will deploy in 2020 to clean energy home improvement projects. grow the organization and further support clean energy expansion in Colorado. Looking ahead, CCEF’s topic priority in 2020 is to raise its pool of investment capital to support the launch of its inaugural product lines.

2020 ANNUAL INDUSTRY REPORT 12 CONNECTICUT GREEN BANK • FuelCell Energy acquired a 14.9 megawatt fuel www.ctgreenbank.com cell park in Bridgeport, CT, for $35.5 million from Dominion Energy, in a step towards diversification The Connecticut Green Bank, the nation’s first of their generation portfolio. FuelCell Energy full-scale green bank, has a mission to confront funded the acquisition with a combination of climate change and provide all of society a restricted cash on hand and a $33 million debt healthier and more prosperous future by increasing facility structured by the Green Bank ($25 million and accelerating the flow of private capital into senior portion from Liberty Bank and Fifth Third markets that energize the green economy. This Bank, and $8 million subordinated capital from is accomplished by leveraging limited public the Green Bank). resources to scale-up and mobilize private • Surpassed the 100-project milestone for its capital investment into Connecticut. In 2017, the multifamily housing program while reaching Connecticut Green Bank received the Innovations over 8,000 units through the financing of $34 in American Government Award from the Harvard million in clean energy and health and safety Kennedy School Ash Center for Democratic improvements for affordable properties Governance and innovation for their “Sparking the Green Bank Movement” nomination. • The Green Bank’s Solar for All initiative continued to gain traction in the state and its partner, In 2019, the Connecticut Green Bank had its best PosiGen, continued deploying solar and efficiency year to date for financing clean energy projects in leases that have allowed Connecticut to surpass Connecticut, using $36m in public funds to cause parity in terms of solar deployment in low to over $427m in total investment in the state. A few moderate income communities and beyond solar highlights from the year: for communities of color. The Green Bank worked • Issued the first solar Asset Backed Security (ABS) with PosiGen and Ares Capital to restructure a by any green bank which securitized the income three-year, $90 million credit facility, allowing from long-term purchase contracts with the PosiGen to continue their mission in Connecticut utilities for Solar Home Renewable Energy and expand to other states. (SHRECs) for Renewable Portfolio Standard In 2020, the Connecticut Green Bank is focused (RPS) compliance from projects generating clean on issuing the first Green Liberty Bonds (www. energy through the Green Bank’s Residential greenlibertybonds.com) to confront climate change. Solar Investment Program (RSIP). This $38.6 million was a two-time winner of Environmental Finance’s 2020 awards for DC GREEN BANK Innovation in Green Structure and Asset www.dcgreenbank.org Backed Bond of the Year The DC Green Bank was established to • Established a new source of capital for increase access to funding for energy efficiency Eversource’s Small Business Energy Advantage improvements and clean energy installations that (SBEA) program where the Green Bank and make District households and businesses greener Amalgamated Bank provide $55 million to and create local jobs. The DC Green Bank will provide zero interest loans to small businesses provide funding to help decrease utility bills and and lowered the cost of capital for the state’s save residents money, while reducing greenhouse ratepayers gas emissions and protecting the environment. • C-PACE, which has now completed more than 300 It will also support clean energy employers and projects statewide, had a stellar year with the will preserve and create jobs. Recently, the Green Green Bank having completed $20.7 million in Bank completed the appointment of the full C-PACE financing. This includes $7.2 million in Board of Directors for the organization and has new transactions underwritten throughout the hired its first CEO, Eli Hopson. The DC Green Bank year and a $13.5 million repurchase of C-PACE is currently advertising several positions on its loans upon the successful termination of its website, www.dcgreenbank.com. C-PACE financing facility with Hannon Armstrong to enhance the Green Bank’s sustainability.

2020 ANNUAL INDUSTRY REPORT 13 ENERGIZE DELAWARE (DELAWARE year, SELF raised a total of $9 million, of which $2 SUSTAINABLE ENERGY UTILITY) million was from a Community Reinvestment Act www.energizedelaware.org (CRA) bank investment and $5 million from a JP Morgan Chase grant. Most of these funds will be Energize Delaware continued providing value deployed in 2020-2023. to Delaware through its energy efficiency and clean energy programs in 2019. The organization SELF’s highlights for 2019 include: continued to sustain and strengthen its popular • SELF grew its lending by 71%, reaching $10 programs, while at the same time rolling out new million in unsecured single-family loans of which programs. Energize Delaware notched several 60% have been for energy efficiency and clean accomplishments in 2019: energy home projects • Permanent long-term bond financing for $19 • SELF had a record year in 2019, closing over 240 million in guaranteed energy saving performance residential loans for $2.6 million in a single year contracts completed in February • Cumulatively SELF has helped over 4,000 people • Closed 22 commercial low interest loans make to energy efficiency, solar energy, and financing $5.2m in energy efficiency and clean climate resilience home improvements energy projects • In 2019 SELF also helped 37 homeowners in • Received the ENERGY STAR® Sustained South Carolina and Alabama Excellence Award for Program Delivery of its • Over 73% of SELF clients are low-to-moderate Home Performance with ENERGY STAR® Program income; 50% are women; 15% U.S. Veterans; 54% • After a three-year campaign, D-PACE, a are elderly, and 10% of clients have a disability commercial Property Assessed Clean Energy • Energy efficiency upgrades have helped SELF financing program was launched clients save an average 26% on energy bills and • Lights On Delaware Strong was fully funded as avoid over 1,100 metric tons of CO2 emissions a statewide program after successful pilots in • SELF was lead awardee of a collaborative that Dover and Seaford improved safety and efficiency received a $5 million grant award from the • Fully launched and funded the new Home Energy JPMorgan Chase Pro-Neighborhood Competition Counseling and Check-Up (HEC2) Program aimed at funding green affordable housing units • Fully launched the “Energize Delaware” Brand along railway stations in South Florida Awareness Campaign in an effort to reach more • The project aims to leverage $5 million into Delawareans $75 million in investments for 300 energy • Selected to be the Grant Management agency for efficient and sustainable new and rehabbed the new Empowerment Grant Program funded by affordable housing units Delmarva Power • In addition, SELF will deploy 200 loans in South Florida and develop new loan Energize Delaware is dedicated to the goals of products for green affordable housing rehabs reducing energy consumption via energy efficiency, and new construction in the next 3 years creating green jobs and reducing greenhouse gas pollution, all while saving its customers money and • SELF was also awarded $402,000 from the CDFI reducing our dependence on foreign oil. Fund • Finally, SELF received the Sustainable Business FLORIDA SOLAR AND ENERGY LOAN FUND award in the Private-Public Partnership category (SELF) from the Sustany Foundation in Tampa, Florida www.solarenergyloanfund.org

In 2019, SELF deployed $2.6 million into solar and energy efficiency projects. Over the course of the

2020 ANNUAL INDUSTRY REPORT 14 HAWAII GREEN INFRASTRUCTURE IPC also secured operating grant funding to expand AUTHORITY outside of Connecticut from The Kresge Foundation www.gems.hawaii.gov and McKnight Foundation.

2019 was a year of growth and new opportunities With the support of the William & Flora Hewlett for the Hawaii Green Infrastructure Authority. The Foundation and in partnership with Michigan organization achieved a number of milestones, Saves and Connecticut Green Bank, a cloud-based including the following: workflow platform was developed and launched, called NGEN, that enables the scale-up of a • Facilitated almost $25.0 million in capital homeowner energy loan program in new regions invested in clean energy projects over the last where local lenders deliver a standardized energy calendar year. Total capital invested since HGIA’s loan product to homeowners through a network lending programs began in 2016 aggregate of vetted contractors, unlocking local lending almost $122.0 million capacity for climate finance through a loss reserve. • Launched its Green Energy Money $aver On-Bill IPC closed its first investment outside Connecticut Program with a $5M credit facility for BlocPower, a B Corp • Posted excess revenues over expenses, exceeding provider of leased heat pumps for underserved all prior years’ deficits; and properties in the urban core. A major focus in 2020 will be on launching our ownership platform • Celebrated its 5th year in operation. for distributed commercial solar and community Priorities in 2020 include securing additional loan solar projects, completing our initial capital raise, capital to deploy new loan products and automate and building out deployment partnerships with residential loan origination and commercial loan developers, originators and channel partners such servicing. as nonprofits, other green banks, and CDFIs.

INCLUSIVE PROSPERITY CAPITAL MARYLAND CLEAN ENERGY CENTER www.inclusiveprosperitycapital.org www.mdcleanenergy.org

Inclusive Prosperity Capital (IPC) is a not-for-profit The Maryland Clean Energy Center (MCEC) is a specialty finance organization focusing on the corporate instrumentality of the state, created intersection of community development, clean to foster the adoption of advanced clean energy energy finance, and climate impact. IPC spun out products, services and technologies. Through of the Connecticut Green Bank in 2018 to increase its financing activities and programs to date, investment in underserved markets nationally, MCEC has leveraged over $76M in private capital including low- and moderate-income communities, investment to achieve a 10 to 1 return on state by accessing new mission-driven capital sources and federal funds invested. MCEC is currently and forging partnerships with mission aligned preparing to re-launch a statewide residential lenders, community-based organizations and energy efficiency lending program and is now others. 2019 was a year focused on capital raising, providing pre-development technical support to product development, building partnerships and drive business more expeditiously to the market. pipeline, with a focus on NY, New England, Midwest During 2020, MCEC launched the Maryland and Mid-Atlantic. IPC also supported Connecticut Energy Innovation Accelerator to support tech to Green Bank’s financing programs and investments market commercialization of energy technologies for the residential sector and underserved credits emerging from universities and labs in the state, and technologies. IPC closed a $10M guarantee hosted the Maryland Clean Energy Summit to from The Kresge Foundation that laid the convene industry thought leaders, and completed groundwork for raising a flexible capital stack from a strategic plan study recommending investment a range of investors as well as a $3M program pathways for the self-sustainability of the related investment from The Kresge Foundation instrumentality in the future. for solar and storage for resiliency in urban areas.

2020 ANNUAL INDUSTRY REPORT 15 MICHIGAN SAVES MONTGOMERY COUNTY (MD) GREEN BANK www.michigansaves.org www.mcgreenbank.org

Michigan Saves is the nation’s first independent, In 2019, the Montgomery County Green Bank (MC nonprofit green bank, committed to serving all Green Bank) closed two loans under its Commercial consumers and clean energy markets with easy, Loan for Energy Efficiency and Renewables product accessible, and affordable financing solutions totaling $1 million in project investment; and that fill market gaps. By leveraging each dollar provided a critical $400,000 bridge loan on one of public funding to finance more than $30 in project to help move this project forward. MC Green private investments, Michigan Saves reached a Bank also launched a residential lending product new milestone in 2019—surpassing $229 million with two credit unions that can support $5 million in clean energy financing for Michiganders. In in energy efficiency and renewable energy projects 2019 alone, Michigan Saves supported almost $60 for homeowners. MC Green Bank completed a million of energy improvements. technical assistance pilot that supported two affordable housing owners to identify energy Michigan Saves kicked off the year with improvement opportunities and strategies for website and residential loan application center undertaking either immediately or incorporating enhancements, after which the green bank into their refinance strategies. partnered with Inclusive Prosperity Capital (IPC) to develop and pilot a new technology platform Looking ahead to 2020, MC Green Bank will be: that would help program managers, lenders, and • Supporting commercial property owners with contractors communicate, track loan progress, CLEER and alternative financing vehicles and complete administrative requirements. This innovative new system, called the National Green • Supporting energy efficiency and renewable Energy Network (NGEN), is being offered through energy projects of homeowners through its IPC to other green financing entities to help residential lending program reduce costs and create efficiencies in program • Launching a commercial solar PPA program to management and design. Michigan and Connecticut serve nonprofits and faith-based organizations launched the platform in 2019. with no out-of-pocket costs and low-price kWh pricing For residential customers, Michigan Saves launched a low-to-moderate income (LMI) revolving loan • Launching a community solar project to serve and grant pilot program funded by DTE Energy. The County residents, including 30% Low- and combination of a small loan and grant allows LMI Moderate-Income households customers in DTE’s service territory to make energy • Supporting several low- and moderate-income efficiency improvements that will be paid for by condominium communities with technical utility savings, with no cash outlay. assistance to assess their energy needs and define a plan for addressing their needs through Michigan Saves also received national recognition a pilot program in conjunction with energy from Rep. Debbie Dingell of Michigan upon her performance contractors introduction of the National Climate Bank Act of 2019. Representative Dingell lauded Michigan’s • Launching programs that support Covid-19 green bank as a national leader in clean energy and recovery encouraged the federal government to follow its successful example. Later, Gov. Gretchen Whitmer NEVADA CLEAN ENERGY FUND of Michigan proposed a one-time, $5 million www.nevadacef.org appropriation to Michigan Saves in the state’s 2021 budget to leverage private investment in clean The Nevada legislature allocated $400,000 in energy improvements for Michigan’s residents and funding for start-up costs for the Nevada Clean businesses. This investment would allow Michigan Energy Fund in 2019. The NCEF is the nation’s Saves to make clean energy options affordable and first Green Bank that was created by a Republican accessible for even more Michiganders. governor in the US, Governor Brian Sandoval. The

2020 ANNUAL INDUSTRY REPORT 16 NCEF has been incorporated, received 501(c)(3) energy investments. NY Green Bank has financed status from the IRS, created foundational governance projects across the State, including highly efficient documents, established an online presence, greenhouses, LEED certified hotels, community obtained pro bono legal representation, created a distributed solar, renewable and energy efficiency draft business plan, and will hire its first Executive projects to benefit low- and moderate-income Director once the funds are received. communities, and more. NY Green Bank has played a variety of roles in the capital structures of these NEW YORK CITY ENERGY EFFICIENCY projects, including providing construction finance, short-term aggregation finance and long-term CORPORATION (NYCEEC) finance (including mini-perm structures), and has www.nyceec.com invested as a senior lender, back-leverage lender, In 2019, NYCEEC finalized a new three-year and subordinated lender. strategic plan with the overarching impact goal to achieve $1 billion of cumulative investment impact RHODE ISLAND INFRASTRUCTURE BANK in energy efficiency and clean energy by 2025. The www.riib.org new plan places greater focus on various means of driving impact including stronger emphasis on In 2019 the Infrastructure Bank facilitated financing projects in underserved communities over $121 million of financing for a variety of and “crowding in” more third-party capital into environmental infrastructure projects, of which green investments. At the end of the calendar year, 49% leveraged private capital sources. In all, NYCEEC mobilized $168 million of capital, and the $121 million of project finance will support “greened” nearly 7,000 affordable housing units approximately 3,000 jobs for Rhode Island’s skilled with its financing. laborers. Of the total investment, the Bank financed $11.3 million in energy projects for public and As the New York City PACE administrator, NYCEEC private sector clients. These clean energy projects worked closely together with the City of New saved its clients over $10 million in energy costs York, prospective PACE lenders, and other relevant while reducing greenhouse gas emissions by stakeholders to implement the upcoming NYC 32,100 metric carbon tons, a figure equivalent to C-PACE program. With 12 lending partnerships, 6,935 average passenger vehicles being driven for NYCEEC continued to focus on growing such one year. partnerships with banks, CDFIs, private investors, specialty finance companies and affordable housing The Bank’s C-PACE program grew year-over year lenders. NYCEEC continued to assist other local by 48% while financing its first new construction green banks in their formation, including the DC project and its first significant energy efficiency Green Bank, and expects to focus on providing renovation at a prime hotel property. Via the more green bank advisory services in 2020. NYCEEC Bank’s other environmental infrastructure is a 501(c)(3) specialty lender that provides loans programs, it financed its first “Green Streets” for energy efficiency and clean energy projects initiative that reduced impervious pavement in NYC and throughout the Northeast and Mid- through the deployment of green stormwater Atlantic regions. technologies for local watersheds. The Bank also launched the Municipal Resilience Program and contributed $1 million of capital to support NY GREEN BANK environmental infrastructure projects that protect www.greenbank.ny.gov local economies from the impacts of climate NY Green Bank had a strong close to 2019, with change. Looking forward, the Bank will continue to $271.6 million of newly committed capital for catalyze investment in resilient clean energy and the year – more than in any previous calendar environmental infrastructure, while growing local year. NY Green Bank has built on that momentum jobs and protecting the environment. in the first quarter of 2020. As of March 31, 2020, total committed capital grew to over $959 million, stimulating up to $2.6 billion in clean

2020 ANNUAL INDUSTRY REPORT 17 Looking Ahead for Green Banks Green banks address clean energy financing needs to be enjoyed by people and businesses of all across many different markets. There are several walks of life, not just those that may have more new markets where green banks are beginning to access to information about the existence of take a leadership role - serving low- and moderate- these programs. income consumers (LMI), financing climate resilience • Climate Access Fund: In 2019, the Climate Access projects, and financing energy storage projects - and Fund secured $600,000 in operating funds and this role might expand in the coming years. identified $1.3m in low-cost debt to finance community solar projects in LMI areas. The Green Bank Low- and Moderate-Income organization expanded its pipeline of potential Household (LMI) Lending low-income community solar projects and is Lending to LMI borrowers is a key component looking forward to deploying its debt and guaranty of green banks’ work in the U.S., and that capital in innovative ways in 2020 for the benefit focus will only grow, especially in response to of low-income households in Maryland. the economic crisis induced by the COVID-19 pandemic. Green banks throughout the history of • Inclusive Prosperity Capital: Inclusive Prosperity the movement have sought ways to make clean Capital was created specifically to bring clean energy accessible and affordable to all, including energy measures to underserved communities through non-traditional methods in Connecticut and around the US. In 2019 such as evaluating borrowers based on utility bill IPC closed a $10M guarantee from The Kresge repayment history as opposed to solely relying on Foundation that laid the groundwork for raising a credit scores. These more flexible approaches have flexible capital stack from a range of investors as yielded major results while demonstrating that well as a $3M program related investment from default risk is not solely tied to credit scores. The Kresge Foundation for solar and storage for resiliency in urban areas. A number of green banks have led the way in • NY Green Bank: The NY Green Bank has given serving LMI communities around the country: special focus to lending to community solar projects across the state that support LMI • Florida Solar and Energy Loan Fund (SELF): communities. Since its inception, the NY Green SELF is currently the only green bank that has Bank has financed transactions of more than Community Development $227 million for community solar projects, and (CDFI) status, meaning that their primary mission many of these projects are making an impact in is to focus on LMI customers. 73% of SELF’s $10 LMI communities in the state. The NY Green Bank million plus in total lending has been directed believes that “if a person has a good payment toward LMI borrowers, with a less than 1.5% history track record, having a FICO score should default rate on its lending portfolio. Borrowers not be a threshold requirement to participate save an average of 26% on their energy bills after in community solar projects.” Additionally, in the loans are made. March 2020 NY Green Bank provided a $25.0 • Connecticut Green Bank: The Connecticut Green million senior secured, multi-draw credit facility Bank has achieved “parity” in its solar lending to Inclusive Prosperity Capital to support its operations, meaning that the households and investments in underlying energy efficiency, solar, businesses that have received solar loans from and other sustainable infrastructure transactions the Connecticut Green Bank are representative that will benefit low- and moderate-income of the demographics of the state itself. The communities and underserved markets. organization has achieved “beyond parity” with • Michigan Saves: Michigan Saves’ residential solar lending to communities of color. This focus lending in LMI communities has been 56% of on parity has allowed the benefits of going solar their overall residential portfolio. In 2019, the

2020 ANNUAL INDUSTRY REPORT 18 organization launched a LMI revolving loan and of the subscriptions to LMI renter and owner grant pilot program funded by DTE Energy. The households. combination of a small loan and grant allows • Hawaii Green Infrastructure Authority (HGIA): The LMI customers in DTE’s service territory to make HGIA has created an on-bill financing program energy efficiency improvements that will be paid that makes clean energy upgrades accessible to for by utility savings, with no cash outlay. LMI renters across the state. The Green Energy • Montgomery County Green Bank: MC Green Money Saver (GEM$) program allows renters Bank’s initial residential investment of $1.2 to implement energy efficiency and clean million supported a 100% LMI community of energy upgrades that save money from day one, over 200 affordable homes. MC Green Bank while ensuring that the repayment of the loan also conducted technical assistance for two continues on with the next tenant that rents the affordable housing owners with over 300 units space. In September of 2019, HGIA committed to of rental homes dedicated to LMI residents only lend to underserved communities in Hawaii to identify energy savings improvements for moving forward. these properties. MC Green Bank is conducting a technical assistance program for up to 8 This flurry of activity serving LMI communities affordable condominium properties to support through green banks is slated to continue and even energy improvements that can improve health, accelerate in 2020 and moving forward, thanks to comfort, and value of these properties. MC a concerted effort across all green banks to bring Green Bank is also investing in community solar capital and savings to underserved communities projects which will at a minimum deliver 30% across the country.

2020 ANNUAL INDUSTRY REPORT 19 2020 ANNUAL INDUSTRY REPORT 19 Resilience Lending In the world of climate policy, there are two of the project, and unpriced positive externalities traditional categories: mitigation and adaptation. don’t put food on the table for lenders. Safe to say, Mitigation means pro-actively combating the the larger nut of adaptation financing has yet to be causes of climate change - for example, adding completely cracked. This is where green banks are clean electricity generation such as wind or solar beginning to step into the void. to the electricity grid which displaces fossil fuel- fired electricity. Adaptation means adapting to the Green banks have begun to apply themselves to changing world we live in to be better prepared for the task of identifying quantifiable cash flows the consequences of climate change. or savings associated with adaptation projects and have already had some success. In Florida, Generally speaking, mitigation activities, such as the Florida Solar & Energy Loan Fund (SELF) deploying clean electricity generating resources, has created a program that takes advantage are easier to finance because of the expected future of the insurance premium savings enjoyed by cash flows that arise from these technologies. homeowners that harden their roofs against the A bank can feel confident lending to a solar threat of hurricanes, and uses those anticipated project because the project itself will result in the savings to help secure a loan provided by SELF to generation of a valuable commodity, electricity, finance the upfront cost of the entire project. The the proceeds from which can be used to repay the Rhode Island Infrastructure Bank has also taken loan. Note that, financing mitigation is easier than a leading position on resilience lending through financing adaptation, financing mitigation is not its Resilient Rhody program. The Bank is home to easy. Currently, even with the literal burning platform the state’s Chief Resilience Officer, and will bring of climate change, new investment in renewables is recommended projects from a resiliency task force nowhere near where it is required to be in order to from planning to implementation. stave off the worst effects of climate change. This type of financial innovation will require Adaptation activities, however, do not benefit patience, creativity, and long-term thinking, from the same intrinsic cash flow generating which green banks have in spades. And as more characteristics as mitigation activities such as wind governments and financial institutions (especially and solar generation. Generally, adaptation projects in the insurance industry) are recognizing the value provide less quantifiable financial benefits than of these types of adaptation projects, more ways to mitigation, meaning that lenders are more hesitant bring expected future cash flows or future savings to make loans to these types of projects. A sea associated with these projects will be identified by wall might save property damage for homeowners green banks. The Clean Energy Jobs Fund would that live on a shoreline, but as far as a lender is allow for these types of innovative financing concerned this is an unpriced positive externality techniques to flourish at scale.

2020 ANNUAL INDUSTRY REPORT 20 Energy Storage Lending Energy storage is a key element of success in the electricity bills - energy storage comes with a more battle against climate change. The financing market diffuse set of financial benefits. The image below, for energy storage technologies is expanding, from the Rocky Mountain Institute, illustrates the with affordable financing beginning to become different value streams that energy storage can accessible to these technologies at scale. However, provide to different types of customers. the market remains nascent, much like the wind and solar financing market of a decade ago. Green Aside from blackout recovery, which offers a banks have a role to play in the deployment of significant but difficult to quantify value, there are energy storage technologies. three main sources of value that can be derived by commercial and industrial sector end-users While clean energy generation offers one clear and that could benefit from state or local Green Bank easily quantifiable financial benefit to a customer financing: demand charge management, demand - predictable future cash flows associated with response, and time-of-use bill management. selling the electricity generated or using it to offset

Energy Arbitrage Frequency Regulation ISO/RTO Spin/ Non-Spin Reserves SERVICES Voltage Support Black Start

Resource Adequacy UTILITY Distribution Deferral SERVICES Transmission Congestion Relief Transmission Deferral

Time-of-Use Bill Management CUSTOMER Increased PV Self-Consumption SERVICES Demand Charge Reduction Backup Power

Source: https://rmi.org/wp-content/uploads/2017/03/RMI-TheEconomicsOfBatteryEnergyStorage-FullReport-FINAL.pdf

2020 ANNUAL INDUSTRY REPORT 21 Demand charge management is the largest customer consumes during their highest level of opportunity. Electricity bills for commercial and demand over a billing period. Demand charges can industrial customers are composed of two different account for over 50% of a company’s electric bill. An charges: total consumption or usage (kWh) and illustrative example of the benefits that an energy demand charges (kW). The customer’s utility bases storage system can provide for a business’s demand a portion of the electricity bill on the electricity the charge management is provided below:

PEAK DEMAND SAVINGS $7,875

6 am 12 pm 6 pm 12 am

Original Power Lead Power Lead with Energy Storage

Commercial and industrial customers can also allows for the business case to be made for benefit from time-of-use management as well energy storage projects and makes the projects as participation in demand response programs. increasingly viable for financing. Despite this Commercial and industrial customers that choose opportunity, financing concerns still exist. “If the to participate in voluntary time-of-use rate energy storage market is going to grow beyond the schedules would be able to realize cost savings early adopters, there’s going to have to be more thanks to energy storage, and they could also widely available, low-cost financing.” Energy storage see benefits from participating in utility demand technology is a mature and dependable technology response incentive programs. in many areas, but it is relatively new and with that newness comes an association of risk. The potential revenue and cost-reduction sources covered above can be combined into a valuable “Investors are hesitant to invest in relatively earlier asset for commercial and industrial customers, a stage technology such as energy storage as these practice known as value stacking. Value stacking are viewed to be more vulnerable to delays and

2020 ANNUAL INDUSTRY REPORT 22 to technology performance risk.” A study from the elements of a project’s capital stack that private Environmental Energy Institute at the University of capital is currently not filling. For example, a state Windsor concluded that “currently, energy storage or local green bank can participate in the project’s as a solution is more inhibited by project financing capital stack with subordinated debt, or else than by the technology itself. High capital costs can offer a credit enhancement such as a loan- and lack of financing options and incentives loss reserve that can help coax lenders into this make it difficult for large scale energy storage to relatively new market by de-risking the project to a be realized.” large degree. It is much easier for a lender to step into a new underwriting field if they have this type Additionally, a Greentech Media (GTM) study of green bank support to back them up. found that “most of the developers and financiers interviewed [for the GTM study] named credit The Clean Energy Jobs Fund can play a similar role risk – the likelihood that the storage off-taker by providing credit and credit support to utility- follows through with timely payments – as their scale projects with an energy storage component top concern. This worry will drive lenders toward that provide value to utilities and ratepayers. larger C&I customers with lengthy credit histories A study from the Massachusetts Department of and robust credit ratings, which could make it Energy Resources showed that ratepayers stood hard for smaller companies with limited credit to capture $800m in systems benefits with the history to secure financing.” addition of 600 MW of advanced energy storage by 2025. Financing these types of deployment at scale State and local green banks have a key role to play could provide immediate economic benefits for in creating a path toward efficient, liquid financing ratepayers while maximizing overall deployment of markets for energy storage technologies, just as clean energy onto the grid. they did for clean electricity financing markets as those markets were maturing. The NY Green Bank Just as state and local green banks have played has taken the lead thus far among green banks, a key role in helping develop financing markets announcing a $200m commitment for storage- for renewable energy solutions in their respective related investments that help drive down costs and jurisdictions over the last decade, these organizations provide energy storage capabilities where they are can play a similarly key role in the financing markets needed most. for energy storage. The Clean Energy Jobs Fund also offers an opportunity to take energy storage financing For commercial and industrial customers especially, to scale across the United States. state and local green banks can provide critical

Appendix: Methodology The green bank impacts presented in this report are the result of information gathering performed by CGC. Key metrics were collected from public reports issued by each green bank as well as direct information provided to CGC by various green banks upon request. Sources for green bank data in the report are from green bank self-reporting, as well as press releases, public filings, and other communications from the organizations.

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