Many clean energy efforts face high upfront capital costs that serve as barriers to reaping longer term energy savings and environmental and economic development benefits. In the past, efforts to address these barriers have come through rebate and grant programs. More recently, states have begun to develop more innovative financing approaches, such as revolving loan funds and energy savings performance contracting, as well as increasing the use of bonding. Increasingly, states are also looking to leverage private sector capital and employ more secure repayment mechanisms through the use of linked deposit programs, on-bill financing, loan loss reserves and other approaches. These efforts, while more complex, are designed to help build larger scale and more sustainable programs.
The NGA Center helps states identify financing options that are appropriate for their target market and market characteristics, learn about successful programs in other states and develop robust implementation strategies that cover elements such as outreach and marketing, program monitoring and evaluation and technical support. The NGA Center emphasizes the importance of involving a wide range of state players in any financing effort, including governors’ offices, energy offices, public utility commissions, housing finance agencies, state treasuries and economic development authorities.