Clean energy finance programs primarily support investments in clean energy projects and fill a major financing gap in the market. Backed by funding from the American Recovery and Reinvestment Act (ARRA), these programs serve another important purpose: they create finance models that are not only commercially sustainable and scalable, but that will also continue when ARRA grant funds are spent.
Recipients who have been awarded these grants only have a limited amount of time to allocate their ARRA funds to support energy efficiency and renewable energy lending projects. Even if the federal government provides similar funds in the future, it is unlikely that the amounts will equal the level of current State Energy Program (SEP) and Energy Efficiency and Conservation Block Grant (EECBG) Program grants.
This is why it is important for all recipients and program partners to start planning how they will ensure that their newly created financing programs remain sustainable for many years following the original infusion of ARRA funds. In a series of blog posts, we will address how to create self-sustaining clean energy finance programs by focusing on three main strategies:
- Prove that clean energy finance is a profitable line of business for financial institutions.
- Arrange additional funding sources.
- Build the secondary market for energy efficiency and renewable energy loan portfolios.
Each of these strategies will be explained in greater detail during the next few blog posts, so stay tuned!
For questions about maintaining a sustainable financial program that funds clean energy projects, post a comment to this Blog or contact a Technical Assistance Services provider.
Content for this Blog post courtesy of Energy Efficiency Finance Corporation and The Cadmus Group