While energy innovation enjoys a surge of popularity, one crucial element is still lacking: financing. Many forms of renewable power and other energy alternatives have made great strides toward lowering their costs and becoming competitive in open markets, but the challenges remain for many technologies.


Like many pressing problems of the day, progressive thinkers converge to find a solution where there is an obstacle. New York state witnessed such a convergence in November at the second annual International Green Bank Summit. Held at the Manhattan headquarters of the Environmental Defense Fund (EDF), it was co-hosted by the EDF and the New York Green Bank. The event brought together participants from across the country and the world.


Green banks are government-backed financial entities that raise public and private capital to address gaps in market financing for clean and alternative-energy projects. Many banks will not lend to some projects because the technology is not proven, the rate of return is too low, and the risk is too high. Green banks address this need and help these projects get off the ground.


Attending the summit in New York were officials from green banks in Connecticut, Hawaii and New Jersey as well as from Australia, Japan, Malaysia and the United Kingdom. Also in attendance were private lenders and representatives from other states that are considering forming their own green banks.


Participants heard about a number of the challenges facing alternative-energy technologies, which green banks could help overcome. For example, energy efficiency doesn’t always attract traditional financing because of the large upfront costs and slow, long-term realization of financial benefits. Similarly, mid-scale, distributed generation of solar power can also face financing gaps.


Representatives of the green banks announced they expect to collectively deploy some $15 billion in clean energy and energy-efficiency projects and possibly $40 billion in total investment over the next five years


The New York Green Bank is a division of the New York State Energy Research and Development Authority. Still in its infancy, it was formed in 2013 by Gov. Andrew M. Cuomo. Only a few months before the summit, it announced its first transactions, which will generate $800 million in total investment for a variety of projects, including solar, co-generation, and energy-efficiency retrofits.