Energy Financing Institutions
NLR provides information and resources on energy financing institutions for U.S. states, local jurisdictions, communities, and Tribes.
An energy financing institution is fundamentally a focused institution that aims to advance the deployment of advanced energy technologies. Some energy financing institutions make direct loans while others provide credit support to local lenders who make the loans. Energy financing institutions can also make equity investments, but they don't take deposits.
Energy financing institutions can be organized in various ways, including as independent public sector entities or nonprofit corporations of various types. They are often established to complement existing financial institutions by attracting and leveraging private capital that otherwise might be unavailable to a particular market segment. The availability of low-cost capital is a critical factor for achieving cost-competitive financing for energy projects, including energy efficiency. Reduced interest rates, extended loan terms, and low- or no-money-down finance offerings can help broaden eligibility and achieve energy bill savings, provide pricing certainty, and enable investors to achieve attractive investment returns.
U.S. Energy Financing Institutions
According to a Coalition for Green Capital report, as of 2020:
- There were approximately 20 energy financing-type organizations in the United States.
- Energy financing institutions invested nearly $450 million while leveraging another $1.7 billion in private capital.
Depending on the state, energy financing institutions can access public funding, raise capital in private markets and/or receive a steady stream of revenue through utility bill surcharges. Several energy financing institutions in the United States have been established by enabling legislation at the state and local level, with several more under development.
Examples of existing energy financing institutions in the United States include:
Rhode Island Infrastructure Bank
Montgomery County Green Bank (Maryland)
Hawaii Green Energy Market Securitization
Energy Financing Institution Products
A variety of financial products may be targeted to end users such as a home or business owner as well as finance providers, building owners, and energy developers.
Through these products and others, energy financing institutions can help crowd-in private capital by different means, including lowering risks and reducing transactional costs.
Connecticut Green Bank
Connecticut Green Bank, for example, has driven growth in its residential and commercial segments through a residential solar loan and lease program and credit support mechanisms (e.g., credit enhancements) for energy efficiency and solar.
NY Green Bank
The NY Green Bank offers a similar product list, which includes credit enhancements, a multideveloper aggregation service (bundling of multiple smaller solar investments), traditional loans, and combination product of the above.
Michigan Saves
Michigan Saves employs a loan loss reserve mechanism to absorb some of the risks of energy lending and partners with area credit unions. Rather than marketing to end users, Michigan Saves focuses its outreach on installers and related energy companies.
Energy Financing Institution Formation
State and local governments have established energy financing institutions under a variety of structures, legislative directives, and funding sources.
In general, the implementation of an energy financing institution typically follows a process of an early startup phase in which the institutional processes are put in place, followed by a launch of an initial product, and then, eventually, expansion into multiple products and sectors.
For example, Connecticut Green Bank is capitalized by a $.001/kWh surcharge to households in their electricity rates (resulting in a surcharge of about $10 per year per household), while the Montgomery County Green Bank received an approximate $14 million grant from the county that was part of a local utility merger process. As another example, the State of Nevada enacted an energy fund that established the authority and charter for the institution but requires the fund's board of directors to be responsible for securing the necessary startup and capitalization dollars to launch the fund. In North Carolina, Duke University and the Coalition for Green Capital conducted a market opportunity overview to determine the benefits for the state and the organizational structure it should use. The study, along with others, led to the creation of an energy fund in North Carolina.
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Last Updated Dec. 7, 2025