‘Green bank’ envisioned to help fund a clean-energy transition in Maine

Maine’s ambitious plan for transitioning to a clean-energy economy can’t happen without lots of money, funding that’s in short supply during a state budget crunch and pandemic-caused economic downturn.

Some lawmakers and business people say a proposed new source of capital could help: a state-chartered “green bank.”

Green bank advocates met Monday for a Zoom webinar sponsored by the Coalition for Green Capital, a nonprofit that seeks to drive investment in clean energy.

Speakers on the call included Henry Beck, Maine’s state treasurer, who said his office receives calls from investors and rating agencies asking about the state’s commitment to fighting climate change. Also present was Catherine Culley, who builds energy-efficient homes and is a principal at Redfern Properties in Portland, as well as David Gibson, a solar design specialist at ReVision Energy, and Rep. Stanley Paige Zeigler, D-Montville, who has proposed legislation around a clean energy fund.

Green banks leverage public funds to attract private investment. They typically help raise money to combat the impacts of climate change, with measures such as building resilient roads and bridges, making homes more energy efficient and less dependent on fossil fuels, and subsidizing electric transportation.

There are 15 green banks in the country today that have steered more than $5 billion into clean energy projects since 2010, when Connecticut created the first one. Efforts to establish a green bank using state bonds haven’t gained traction in the Maine Legislature, although a new bill is being readied for the upcoming session.

Green bank advocates who met Monday said they are more hopeful for 2021. That’s because the administration of President-elect Joe Biden is likely to support expanding such a financing model through legislation in Congress to fund a federal Clean Energy and Sustainability Accelerator.

A $20 billion allotment would help fund state-level green banks. It already has passed in the U.S. House with the support of Maine’s two representatives, Chellie Pingree and Jared Golden.

In the U.S. Senate, Vice President-elect Kamala Harris has co-sponsored partner legislation.

Federal funding offers Maine its best hope of setting up a green bank, business people on the webinar said.

One selling point is job creation. Estimates seem to vary, but a national, independent analysis of the Clean Energy Accelerator’s impacts indicates that Maine could receive enough initial seed money to create more than 7,000 new jobs over five years. The jobs would be mostly for projects that convert homes from fuel oil to cleaner heating systems.

Another estimate suggests that a $100 million investment to help shift Maine homes away from oil heating would create more than 1,600 jobs over five years.

Either way, the Maine Climate Council, which recently developed a four-year climate action plan to guide the state in drastically reducing greenhouse gas emissions, suggests looking at the green bank option. The bank could be a new program or folded into existing state entities, such as the Finance Authority of Maine and Efficiency Maine.

Green banks receive seed money that they then use to leverage funding from the private sector, up to $4 in private money for every public dollar. The combined funds can be loaned for renewable energy projects, increasing building efficiency, reforestation and clean transportation efforts. The money is repaid over time, to be loaned again for new projects.

As a next step, supporters are looking to pass companion legislation in the U. S. Senate. They are circulating a letter of support primarily aimed at asking Maine’s U.S. senators, Susan Collins and Angus King, to co-sponsor a clean energy accelerator bill.