Banking on energy.

• Author: Durkay, Jocelyn
• Position: TRENDS

As state policymakers continue to investigate ways to increase efficiency and develop renewable energy--as well as to bolster resiliency by making the energy system less vulnerable to outages-some are turning to energy banks. State energy banks (also known as "green" or "resilience" banks) are public-private partnerships that combine public funding with private capital and expertise to lower the cost of investing in renewable, resilient or efficient energy projects. These banks provide an array of financing tools that allow customers to make payments on low-interest loans while realizing the benefits of the project as soon as it is complete. Eligible projects include updating insulation in an older building, adding solar panels to a retail center or equipping a public building with technology to generate power during outages.

By coordinating these services in one place, proponents of this new type of energy financing believe states will be more successful at leveraging funds from the private sector. They will also benefit from the multiplier effect private sector investments often have, all while making technology more competitive and less expensive through broader adoption.

Energy banks can be tailored to meet states' specific energy or environmental goals. For example. New Jersey's Energy Resilience Bank was established after the extensive damage to energy and public infrastructure caused by Superstorm Sandy. The state announced...