Last year, the Northern Cheyenne Tribe launched a successful solar energy pilot initiative of the Northern Plains Tribal Solar for All program. The pilot program was the first phase of the White River Community Solar project, which will deploy 15 solar energy systems at the homes of tribal elders. This year, the program got a major boost with its selection as one of the participants in the new federal Solar for All program. The federal program is just one of the new initiatives set to help the country make good on its commitment to cleaner energy. There are ways for banks to take part in green initiatives as well. If your community financial institution (CFI) has been participating in or considering green banking, there’s a new “green bank” that can help you get started. The federally-funded program is part of Biden’s Inflation Reduction Act and has around $27B in funding for green projects.The Push for Green Initiatives
Green bank funding is starting to be doled out to help cover the costs of energy efficiency methods and solar panels, with a primary focus on disadvantaged and rural communities — 70% of the capital is dedicated to those communities. The Environmental Protection Agency (EPA) runs the program through a large network of participants and providers around the country, and the money comes from the Greenhouse Gas Reduction Fund, which is designed to decrease energy costs, encourage energy independence, and revitalize economically disadvantaged communities through green practices.One of the targets for spending is small businesses, which should be of interest to CFIs, who are experts in small business lending. If your CFI has been looking for ways to fund more green initiatives, this could be an opportune moment to get more involved. The fund is divided into three parts, each of which could be an entry point for CFI participation.
Green bank funding is starting to be doled out to help cover the costs of energy efficiency methods and solar panels, with a primary focus on disadvantaged and rural communities — 70% of the capital is dedicated to those communities. The Environmental Protection Agency (EPA) runs the program through a large network of participants and providers around the country, and the money comes from the Greenhouse Gas Reduction Fund, which is designed to decrease energy costs, encourage energy independence, and revitalize economically disadvantaged communities through green practices.One of the targets for spending is small businesses, which should be of interest to CFIs, who are experts in small business lending. If your CFI has been looking for ways to fund more green initiatives, this could be an opportune moment to get more involved. The fund is divided into three parts, each of which could be an entry point for CFI participation.
- The $14B National Clean Investment Fund. This fund will be overseen by three national non-profits which will then partner with other providers of capital to finance businesses, community lenders, and others who carry out clean technology projects.
- The $6B Clean Communities Investment Accelerator. A handful of non-profits will work with lenders — both non-profits and local financial institutions — to fund clean energy projects in low-income and disadvantaged communities, with a specific focus on Appalachian and Native communities.
- The $7B Solar for All program. This program will provide grants mainly to cities, non-profits, and tribal governments to expand residential solar in low-income and disadvantaged communities. The EPA split the money among 60 organizations, which will in turn bring low-income solar options to 25 states that have never had such a statewide program before.
How CFIs Can Go GreenMuch of the groundwork and key player selections have taken place over the past few months, and the kickoff for these initiatives can’t come soon enough. According to the CEO and co-founder of the Coalition for Green Capital Reed Hundt, demand for clean energy has already exceeded the $20B that the EPA set aside for public funds. There’s also a demand for environmentally knowledgeable, trusted lending partners to help with these efforts. For CFIs interested in participating in these green bank initiatives, there are a number of possible entry points:
- Review your lending practices and find opportunities to prioritize lending to green initiatives, particularly for underserved communities.
- The Solar for All program will involve vendors who can install solar panels. Encourage your small business solar installer customers to put forward their services to aid the initiative.
- Make a concentrated effort to incorporate clean, green practices within your own institution, from carbon footprint reduction efforts to renewable energy investment, to truly become a CFI with expertise in green lending.
With $27B to hand out, the Greenhouse Gas Reduction Act is aiming to expand access to clean energy initiatives to disadvantaged communities. CFIs would do well to see what green initiatives their own disadvantaged and rural communities could benefit from and seek ways for their small business customers and their own lending practices to lend a helping hand.
