A Maryland Green Bank Would Engage the Private Sector and Encourage More Investment in Energy Efficiency
The Maryland Clean Energy Center (MCEC) is set to deliver a comprehensive report to the General Assembly this week that provides a set of options and recommendations for establishing a new “green bank” to spur investments in energy efficiency and renewable energy technologies. The report, written with support from the Coalition for Green Capital, Town Creek Foundation, and other key stakeholders, was authorized by a bill enacted in 2014. The General Assembly is expected to consider green bank legislation when it convenes in January.
Full disclosure: before joining the Alliance in August, I worked closely with MCEC over many years on a range of energy efficiency financing initiatives. I staffed the original green bank bill for the Maryland Energy Administration, and have provided much input along the way. Most recently, I attended MCEC’s final stakeholder session in Annapolis on November 17 to review the final draft of the report. So, it is fair to say that I am a little bit of a homer when it comes to a Maryland green bank. I think the potential for a Maryland green bank to attract private-sector capital to the clean energy sector is incredibly promising.
A green bank is defined, according to MCEC, as “a financial organization that uses strategic public-private partnerships to overcome market barriers and increase the amount of private capital available to finance clean energy projects.” Other states (notably Connecticut and New York) have already created green banks to catalyze private sector investments and facilitate transactions. Like Connecticut and New York, Maryland is a leader in energy efficiency and its consumers and businesses enjoy a well-established track record of cost-effective policies and programs. A Maryland green bank could potentially complement existing efforts and financing programs by attracting and leveraging even more private sector investment to fund worthy projects and broaden the reach of energy efficiency in Maryland. As proposed in MCEC’s report, these investments could be targeted through thoughtful program design to benefit sectors like low-to-moderate income residential buildings and small and medium-sized businesses. Sound governance and solid investment guidelines are important to ensure that benefits are being realized.
The General Assembly will consider new energy policy proposals and many other issues important to residents and businesses when it gathers in Annapolis in January. Thanks to these efforts, when legislators turn their attention to a Maryland green bank, they will find an impressive collection of data and options for organizational design and funding. Hopefully Maryland will find a way to continue being a leader in energy efficiency and establish a new green bank.