What are green banks?
Imagine if your bank only lent money for projects that fight climate change.
Did you know this type of financial institution already exists, and more and more of them are opening for climate conscious customers across the country?
Green banks use payment plans to remove financial barriers for people who are ready to make the transition from dirty fossil fuels to a clean energy future.
“It’s important to understand that green banks are not just funding clean energy,” says Senior Attorney Jennifer Whitfield. Based in SELC’s Atlanta Office, she is laying the groundwork for an equitable transition to clean energy in Georgia.
“Green banks also strategically address energy burden, create green jobs, and foster economic development in communities that have historically been disproportionately impacted by pollution,” Whitfield adds.
How do green banks work?
While the climate crisis heats up, green banks put rapid deployment of clean energy over profit, opening new markets to opportunities that otherwise wouldn’t exist.
These mission-driven financing institutions use public funds to attract private investment.
They offer monthly and quarterly loan payments. These institutions can be non-profit, public, or quasi-public.
What are the benefits of green banking?
When more clean energy is deployed at a lower cost, it saves consumers money, protects the environment, and helps developers and investors secure successful clean energy projects.
Some green banks may have additional goals — such as increasing access to affordable housing — but all green banks exist to make rapid deployment of clean energy an option for more people.
This is creative thinking in action.
Alys Campaigne, Climate Initiative Leader
How many green banks currently exist?
A report published in May 2021 shows approximately 20 green bank-type organizations in the United States.
These banks have invested more than $450 million in clean energy projects while leveraging another $1.7 billion in private capital.
Is there a green bank near me?
Most Southern states are still exploring the opportunity, but this style of community lending has already made a significant impact on our region. Here are a few examples:
- Appalachian Community Capital: While serving a broader rural America, this green bank prioritizes our Appalachian region. It channels funds to support projects like solar installations, renewable energy apprenticeships, and electrified public transit, particularly in low wealth communities.
- North Carolina Clean Energy Fund: This fund brings financial resources and tools to the Carolinas, currently including community solar and electrification programs in several localities.
- Solar and Energy Loan Fund: Based in Florida, SELF operates across several Southern states including Georgia, Alabama, South Carolina, and Tennessee. They finance sustainable and climate-resilient home improvements with a strong focus on providing affordable, unsecured loans to homeowners with the lowest income.
- South Carolina Clean Energy and Resilience Accelerator: This nonprofit green bank is actively working to prepare and build the capacity for clean energy and resilience projects within the state.
- Clean Energy Fund of Texas: Launched in 2022, this green bank focuses on financing energy efficiency, weatherization, and water conservation projects, aiming to reduce carbon emissions and address climate equity.
- Freedmen Green Bank & Trust: This is an emerging green bank focused on leveraging relationships with Historically Black Colleges and Universities to strengthen communities through environmental and economic development.
At SELC, we know green banks and the clean energy projects they make possible are a climate solution worth celebrating.
“This is creative thinking in action,” says Alys Campaigne, leader of SELC’s Climate Initiative. “We can leverage public capital to unlock our clean energy future and ensure every community benefits from climate solutions.”