Link Energy Efficiency Finance Programs to Other Initiatives
One strategy for creating a self-sustaining clean energy finance program is to link it to other development, finance, and financial system reform/support initiatives.
State governments throughout the nation are seeking new ways to increase lending for small and medium enterprises, sustainable and family/local agriculture, public transportation, low-income housing, municipal infrastructure, and other priority sectors consistent with a sustainability investment agenda. Economic development and job creation are the states’ main objectives. Clean energy finance programs can be linked to or become part of those initiatives, and clean energy investment can turn into a leading economic development strategy.
As the first generation energy efficiency/renewable energy finance and loan loss reserve fund programs are set up and become operational, grantees will want to explore opportunities to link with other development financing initiatives. For example, some state housing finance agencies have or are setting up low-income multifamily housing renovation finance programs; energy efficiency/renewable energy investment can be incorporated into them.
Over time, the federal government and state governments may find opportunities to devote an increasing portion of the public resources currently being used to support the financial system through the economic crisis to directly engage in and support clean energy finance. In the United States, the Community Reinvestment Act (CRA) has been in place since the late 1970s, and CRA has defined local housing lending targets for commercial financial institutions. Given that precedent, financial institutions may be able to get CRA credit for making residential energy efficiency and renewable energy loans. Alternatively, a green CRA-type policy could be adopted that sets lending targets for clean energy.