What's A Green Bank? Columbus Clean Energy Initiative Would Invest Millions
A local green energy initiative would establish a fund in what’s known as a green bank to pay subsidies to Columbus residents who switch renewable electricity providers. But what exactly is a green bank?
The proposal backed by the Columbus Clean Energy Initiative would establish what it calls a "Clean Energy Partnership Fund." The idea is to invest $42 million of the city’s operating fund, and use the money to offer subsidies to Columbus electricity consumers who switch to renewable providers.
The proposal’s language designates the New York Green Bank as a possible destination for those dollars.
Douglass Sims from the Natural Resources Defense Council explains green banks invest in green projects, and are often capitalized with public dollars from sources like electric bill surcharges.
“A green bank is essentially a public or quasi-public financial institution,” Sims says. “And they really exist to try to accelerate and mainstream the adoption of clean energy technologies like solar and energy efficiency retrofits.”
Sims says the banks help provide financing to get clean energy projects off the ground, running the gamut from major renewable energy generating stations or smaller retrofitting projects.
“For example, if you want to swap out your windows, get new insulation, new HVAC, boilers, green banks can provide solutions to reduce the cost and increase the availability of financing for those kinds of investments,” Sims says.
But the subsidy program presented in the Columbus Clean Energy Initiative doesn’t exactly match up with those models. Under the proposal, the financial institution would manage the city’s $42 million investment and pay out subsidies to eligible electric customers.
Sims says green banks usually finance projects rather than manage funds, although he notes using one could be a way to generate returns from clean energy projects.
“When they need to pay the subsidies, they can pay the subsidies from this growing fund,” Sims offers. “You know, that would make sense, but that’s not really a green bank program. That’s just a way to sort of put the money in a place where you know it will be utilized for green.”
Local officials have voiced concerns about the proposal diverting money from other public projects without adequate oversight.
The measure gives a panel of the proposal’s backers the job of selecting where the subsidy funds get invested, but it also charges city officials with crafting the deal and gives Columbus City Council final approval. The City Auditor would also have provide quarterly reports on how the money is being used.