In his 2013 State of the State Address, New York Governor Andrew M. Cuomo proposed a $1 billion “Green Bank” to draw in private sector money and spark investment in clean energy projects. The Governor also named a “Cabinet-Level Energy Czar” to advance his clean tech strategies. The announcements are a step forward to promote renewable energy development and boost New York’s clean energy economy.
Governor Cuomo, at his 2013 State of the State address on January 9, 2013, announced innovative proposals to continue clean energy economy advancement. Central to his strategy is a $1 billion Green Bank, a fund that will draw in private sector money to match public funds and spur investment in clean energy technologies. The goal is to provide low-cost and low-risk financing for renewable projects and energy efficiency programs. Part of the funds from Energy Efficiency Portfolio, Renewable Portfolio Standards, and System Benefit Charge will fund the Bank and attract private investment. Governor Cuomo also named Richard Kauffman, Senior Advisor to Energy Secretary Steven Chu, as “Cabinet-Level Energy Czar.” Kauffman will oversee the Green Bank and head the new sub-cabinet formed to oversee clean energy policy and funding.
At present, $1.4 billion is collected and spent annually for renewable projects and energy efficiency measures, with about 80% of the funding provided as one-time subsidies. New York is at the forefront of energy policy innovations favoring the environment, but is still a long way from attaining its clean energy goals, and subsidies alone are not enough to realize the necessary level of clean energy deployment. Through low-cost financing, the Green Bank will allow the state to benefit from more clean energy projects, jobs, and investments. By offering loans and grants to further clean energy projects, the Green Bank will ease financial market obstacles that hinder the flow of private capital to clean tech projects. Given that private sector investment is crucial for the future of renewable energy, the proposed initiative will increase investor confidence in the clean energy sector.
The Green Bank will lower capital costs, thereby expediting the transition to a clean energy economy. It serves to make green energy viable, allowing consumers to benefit from lower prices for renewable and energy-efficient sources. Establishment of the Green Bank will facilitate a cohesive state-level approach to bring innovation and investment to clean energy, opening job opportunities for varying skill and education levels. Private market participation in clean energy markets will increase without hurting taxpayers. The initiative also aims to standardize contracts, enhance information flow to market participants, and monitor project performance.
The proposal intends to remove uncertainties related to federal grants, policy, and state level subsidies for the clean energy sector. The Bank will use bonds, loans, and credit enhancements to support projects during a time of severe budget constraint. Private capital will mitigate investment risks, promote market activity, and reduce costs for borrowers. By overcoming barriers, and instilling more confidence in the investor community, the initiative will allow clean energy markets to function smoothly.
The Green Bank intends to transform the clean energy economy in New York. The concept is the second of its kind in the nation, the first being Connecticut’s Clean Energy Finance and Investment Authority, launched in 2011. However, given the substantial size of New York’s market and the immense influence, the proposed Green Bank can spur a broader movement in support of clean energy across the nation. Apart from the Green Bank, Governor Cuomo announced other clean energy initiatives, such as expanding solar installations and electric vehicle charging stations. The proposals serve to address climate change issues, and suggest positive implications for the economy, in terms of job creation and decreased dependence on external energy sources. The Green Bank is a cost-effective means to support green technologies and harness associated economic benefits.
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