According to Annie Gilleo, 
state policy manager of the American Council for an Energy-Efficient Economy (ACEEE), many tried-and-true financial tools encourage the growth of energy-efficiency projects.


“Programs in the utility sector that offer customers a variety of rebates, incentives and technical services totaled more than $7 billion in 2014,” she said. “In the private market, energy service performance contracts totaled more than $4 billion.”


Furthermore, state energy offices loaned more than $74 million in revolving loans. However, Gilleo said these efforts are but a drop in the bucket compared to actual demand for energy-efficiency project financing.


“One study estimated that more than $279 billion could be invested in energy-efficiency retrofits and upgrades in commercial, residential and institutional markets in the United States, resulting in more than $1 trillion of energy savings over 10 years,” she said.


What can help provide additional financing? The ACEEE points to what are called “green banks”—lending entities created and capitalized by state and local governments.


The ACEEE defines a green bank as “an entity typically created by state or local governments to address the barriers faced by consumers and lenders in financing clean-energy projects and to advance public objectives. They leverage public funds to stimulate private capital investment and typically provide resources above and beyond financing to support demand, including technical assistance and coordination with other clean-energy entities.”


Green banks exist in many forms, and they tend to share the following features: They are publicly chartered financing institutions; they have a mandate to invest in clean energy deployment; they leverage public funds to stimulate private capital; and they offer products across sectors, focusing on bridging market gaps.


ACEEE’s September 2016 report, “Green Bank Accounting: Examining the Current Landscape and Tallying Progress on Energy Efficiency,” identifies a number of green banks: Connecticut Green Bank, Hawaii Green Infrastructure Authority, Michigan Saves, Montgomery County (Md.) Green Bank, NY Green Bank and Rhode Island Infrastructure Bank.


“If more states are looking to green banks to stretch public dollars, fill market gaps and ramp up clean-energy investment, [we] want to know how the early results and lessons learned can shape the next round of green bank deployment,” Gilleo said.