Infrastructure Policy and Programs: Financing | Article

Building and maintaining infrastructure requires capital, and several funding mechanisms could leverage, replenish, and maximize government and private investments in infrastructure.

On-bill financing programs, for example, provide an opportunity for households and businesses to finance energy efficiency retrofits and clean energy upgrades with no upfront payments by tying the obligation to the utility meter, thus allowing for the monthly charge to transfer to the next owner or renter. Such programs are funded in part through the U.S. Department of Agriculture’s Rural Energy Savings Program.

Green banks, mission-driven financial institutions that invest in environmental protection, provide an additional opportunity to collect and deploy funds for climate mitigation and adaptation projects. Over 20 green banks currently exist in the United States, providing flexible and affordable financing for a wide range of clean energy projects that lower emissions and boost climate resilience.

Other financing mechanisms include revolving loan funds, tax credits, and public-private partnerships. EESI’s recent resources on programs and policies to finance climate infrastructure include:

Reports:

Inclusive Financing Programs for Solar Electrification

Historically, on-bill financing programs have focused on energy efficiency measures, but now a new wave of programs is emerging that also finance solar rooftop panels, beneficial electrification projects (which help consumers switch from fossil fuels to electricity), and battery storage devices.

A Resilient Future for Coastal Communities

This report represents a distillation of the ideas, findings, and policy recommendations identified during EESI’s Regional Coastal Resilience Congressional briefing series. Chapter 6 covers three recommendations for financing adaptation and resilience.

Issue Brief:

How Can Revolving Loan Funds Make Our Coasts More Resilient?

A revolving loan fund (RLF) is a self-replenishing financing mechanism that can be used to fund a variety of programs, ranging from small business development to clean water infrastructure. New programs are using the tried-and-trusted RLF model to finance coastal resilience.

Briefings:

Unlocking Capital for Climate Solutions

This briefing explored the climate mitigation and adaptation benefits that would be unlocked by a national climate bank, building upon the experiences of successful green banks across the country.

Energy Efficiency Means Business: Learn How Energy Efficiency Programs Deliver Benefits to Your Constituents

Federal energy efficiency programs create jobs, reduce emissions, and deliver direct meaningful savings to constituent homeowners, consumers, and businesses by encouraging productive public-private partnerships and collaboration.

Implementing Energy Efficiency Programs in Rural America

This briefing explored how more than 60 electric cooperatives and public utilities across the country are using on-bill financing to fund clean energy upgrades for homes and small businesses to reduce burdensome energy costs in rural areas.

Financing Climate Mitigation and Resilience: Lessons from Hawaii

This briefing explored steps Hawaii is taking to reach carbon neutrality by 2045 through innovative efforts to finance and implement climate change mitigation and resilience projects.

Resilience Along the West Coast

A speaker discussed the creation of a revolving loan fund to finance coastal resilience projects on the Puget Sound of Washington state.

Articles:

White House Pushing for Major Expansion of Rural Energy Savings Program (RESP)

Run by the U.S. Department of Agriculture’s Rural Utilities Service, RESP provides rural electric cooperatives and other rural utilities with zero-percent loans to launch or expand energy efficiency financing programs for their members.

Green Banks: Driving Clean Energy Investments and Saving Families Money

Green banks are uniquely positioned to leverage limited public funds and mobilize private capital to scale up clean energy investments and energize the green economy.

Tax Policies for the Energy Transition

Participants of the American Council on Renewable Energy Policy Forum outlined key recommendations for instituting tax credits, stimulating market growth, and advancing technological research and development.

How Juneau’s Climate Action Plan Inspired City-Wide Building Decarbonization

A Juneau, Alaska, non-profit, Renewable Juneau, is playing a key role in helping the community achieve decarbonization goals through numerous programs that offer low-cost electric space- and water-heating equipment for homes and businesses.

Brewery’s Restoration Efforts a Win for Local Community and the Environment

A small business in Waterloo, Iowa, leveraged National Park Service tax credits to fund adaptive re-use of a historic building.

The CLEAN Future Act Holds New Promise for Green Banks

States (and some local governments) have taken the lead in developing and implementing innovative financing programs to provide funds for clean energy investments.

Colorado Utility Launches Innovative Financing Tool for Battery Storage

Holy Cross Energy, a rural electric cooperative serving 58,000 members in western Colorado, launched an on-bill tariff pilot program with EESI's help to finance battery energy storage systems for its members.

Shore Friendly: Financing Coastal Resilience on the Puget Sound

Shore Friendly encourages coastal homeowners in Puget Sound (Washington state) to replace hard armor with natural solutions to erosion, educating residents on the harms of hard armor and providing technical assistance to evaluate properties for soft shore suitability.

What Can Green Banks Do for Rural Areas?

The need for cost-effective energy retrofits is especially pressing in rural communities, which suffer from high energy costs—about 40 percent higher than their urban counterparts. Green banks are especially useful in the rural residential market because they can help remove market barriers and close market gaps.

Mountain Parks Electric Launches “Electrify Everything” On-Bill Program

The “Electrify Everything” program in North Park, Colorado, allows members to use an on-bill tariff model to fund four types of projects: air-source heat pumps, commercial electric vehicle charging stations, insulation upgrades, and solar array installations.

In the Wake of the Coronavirus Outbreak, Innovative Finance Programs Are Ready to Leverage Federal Recovery Funds

The American Recovery and Reinvestment Act of 2009 provided a valuable template for economic recovery via a surge in energy efficiency spending. Policymakers can take lessons from that effort and the following decade of efficiency programs to make an even greater dollar-for-dollar impact.

Washington State Islands Work Towards a Fossil-Fuel-Free Future

A rural electric cooperative in the San Juan Islands off the coast of Washington state is providing a way for customers to finance efficient heat pumps (for both space and water heating) and the removal of their fossil fuel-powered counterparts—without making customers take on debt, thanks to on-bill financing.

Author: Amber Todoroff