"Connecticut Passes America’s First Full ‘Green Bank,’ Proving Clean Energy is a Bipartisan Issue"
Clean energy advocates have been pushing the U.S. Congress to pass the Clean Energy Development Administration (CEDA). CEDA would act as a “green bank” to help provide financing for clean energy companies that may face barriers in funding innovative technologies or first-of-a-kind projects. This program would be instrumental in helping drive down the cost of technologies and the cost of financing — all while driving up the value for American consumers and businesses.
CAP’s Bracken Hendricks and Lisbeth Kaufman report on Connecticut’s effort to lead the way on clean energy financing.
While Gov. Christie works to dismantle clean energy in New Jersey, his neighbor, Connecticut Gov. Malloy just signed a major energy law comprising a broad-based clean energy and economic development program. The Law, SB1243, passed unanimously with bi-partisan support, will reform Connecticut’s energy system to cut costs for consumers and transition to cleaner energy. With a 36-0 vote in the Senate and a 139-8 vote in the House, Gov. Malloy and the Connecticut Legislators demonstrated that clean energy can gain solid bi-partisan support:
House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said in a partisan year, the energy bill “was a refreshing respite. It was a classic example of what you can do when you sit down with people on all sides of an issue.”
The law will combine the former Department of Environmental Protection (DEP) with the former Public Utility Control to create a Department of Energy and Environmental Protection (DEEP) that will oversee the energy system reform. DEEP will be run by the current DEP commissioner, Dan Esty, who is also an environmental Professor, Lawyer and Policy maker from Yale, and author of the prize-winning book “Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. ” Esty, who spoke about the need for comprehensive energy policy at a CAP-hosted conference in November, was a major architect of the bill.
One of the Republican legislators’ most favored provisions in the law is the Clean Energy Finance and Investment Authority (CEFIA), the nation’s first full-scale Green Bank. The proposal comes with a low price tag for taxpayers because it repurposes an existing fund within the state, with which the CEFIA will leverage much larger amounts of private capital. It will take over the current Clean Energy Fund to drive investment and get major new clean energy projects built in Connecticut.
The CEFIA is essentially a state version of the Energy Independence Trust (EIT), which the Center for American Progress first proposed last year with the Coalition for Green Capital in a paper Cutting the Cost of Clean Energy.
The CEFIA is a huge step forward for Connecticut, but it is also an important example for the nation by demonstrating how to cut the cost of investment in renewables and energy efficiency. By providing low-cost financing specifically for clean energy projects, the CEFIA will incentivize new job creating investments in projects, even as it lowers the price of clean and sustainable electricity. By helping bring the industry to scale, and drive new technology “down the cost curve,” Connecticut is helping consumers everywhere.
As more renewable energy is deployed and new energy efficient products come to market, companies will take advantage of economies of scale to decrease the costs of building projects, reaping real benefits for consumers. The CEFIA can serve as a prototype for other State Green Banks, and for federal policy like the Clean Energy Deployment Administration proposed in the Senate to commercialize new technologies and the Energy Independence Trust which will help those technologies reach the market at scale.
Though the U.S. invented and improved many of the clean energy technologies used today, in recent years we have fallen behind in the clean energy race. It’s not that clean energy is scarce, expensive, or bad for business, as opponents would have you believe. Rather, a lack of comprehensive energy policy combined with outdated subsidies for fossil fuels, has created an unfriendly investment environment for clean energy.
Clean energy doesn’t have to be expensive, and it is getting cheaper as it becomes more widespread. For example, take a look at the price declines in solar as manufacturing has ramped up and installations have grown boomed:
As the price of renewables declines, the price of conventional fossil-fuel-generated electricity will continue to rise as global demand for limited reserves of coal and oil grows. But we could be doing much more to get us closer to the day when renewable energy is cheaper than polluting fossil fuels. Policies like Connecticut’s new clean energy fund go a long way to helping American consumers and businesses make this transition.
The U.S. needs smart policies, like Connecticut’s new Clean Energy Finance and Investment Authority, to harness our clean energy potential and further drive down the price of clean energy. Gov. Malloy and the bi-partisan work of the Connecticut legislature have made a major advance in U.S. clean energy policy. The Center for American Progress salutes their leadership. Other states would do well to follow their example.