On May 23, New Jerseyans scored a major economic and environmental victory when Governor Phil Murphy signed a groundbreaking law that will soon make the Garden State an even greener one. The Board of Public Utilities (BPU) has initiated a proceeding that will establish a community solar pilot program within one year of the bill’s signing. Low-income and multifamily households will be able to earn credits on their electric bills for purchasing power from a shared solar array. In just ten years, half the state’s power will come from emissions-free renewable resources, and New Jersey will boast the highest amounts of energy storage and offshore wind in the United States. New Jerseyans can expect clean air, electric bill savings, and the creation of many local and lucrative job openings.
These groundbreaking targets can bring about significant economic growth, especially if New Jersey utilizes a multitude of green financing tools to achieve its goals. The BPU will ensure the state is on track to meet its clean energy goals, as it is putting in place rules and regulations to attract investment. Now, New Jersey should create a green bank to add to its arsenal of green investment mechanisms and to fill the clean energy financing gap identified in EDF’s December 2017 report, Financing New Jersey’s Clean Energy Economy: Pathways for Leadership.
Green banks leverage public funds to catalyze private investment in clean energy projects and sustainable businesses. Companies put this capital to work, expanding their businesses, building new renewable-powered projects, and administering clean energy programs.
That’s great for the businesses, but what about New Jerseyans? As companies expand and undertake new clean energy projects, they need to hire more workers. Green bank financing leads to job growth and more employed New Jerseyans. New Jersey residents could also benefit from green bank loans that support innovative community solar projects that can provide low- and middle-income families access to solar power.
Building on Past Success
New Jersey has done commendable work thus far to transform the Garden State into a green state. For years, New Jersey has been at the forefront of solar development across the United States. Moreover, the recent passage of forward-looking legislation has generated momentum for clean energy projects. With an established green bank, the state can build on this momentum and meet growing demand for environmentally-conscious investment.
The Green Bank Solution
Between 2016 and 2017, for example, the New York Green Bank (NYGB) helped dramatically expand residential solar across New York State with investments in Vivint Solar, SolarCity, and Sunrun Inc., national solar providers that needed capital to boost their New York operations. With millions of dollars in green bank loans, these three companies were able to install rooftop solar panels on thousands of homes statewide.
Similarly, the Rhode Island Infrastructure Bank (RIIB), which serves as the state green bank, has assisted companies in becoming more sustainable. In December 2017, US Extruders, a screw manufacturer based in Westerly, RI, wanted to power its facilities with 210 kW of rooftop solar. The RIIB invested nearly $504,000 through its property-assessed clean energy (PACE) financing program and turned US Extruders’ dream into a reality. According to Rhode Island State Treasurer Seth Magaziner, not only does the solar panel installation reduce carbon emissions, it “keeps our tradesmen and women working.”
New Jersey should continue paving its path towards sustainability by creating a green bank. Governor Murphy’s new statewide targets to advance New Jersey’s clean energy economy represent a major economic and environmental victory. To make the governor’s vision a reality, the state needs a single institution dedicated to green financing.