Measures to cut greenhouse gas emissions are still controversial among Republican politicians, but the idea of “green banking” is gaining a foothold.
Alaska Gov. Mike Dunleavy introduced bills to create an “energy independence fund” to finance sustainable energy projects on Friday.
The legislation dovetails a bill in Congress, primarily sponsored by Democrats. The national bill creates a $100 billion fund to help capitalize state green banks. Alaska Congressman Don Young recently signed on as a co-sponsor of that bill.
Chris Rose of the Renewable Energy Alaska Project has advocated for a state green bank for years. One idea, Rose said, is to build on Alaska’s successful home weatherization grant program.
“Over 50,000 homes got weatherized. The average energy savings was 30%,” he said. “But the state cannot afford those kinds of grants anymore. So we’ve been looking for a while at the idea of a green bank, to provide affordable financing for those kinds of projects.”
The need for green finance was brought home to Rose a few months ago when he tried to get a loan for rooftop solar panels. The best he could find was 8% interest.
“This is interesting, because I could go to that same financial institution and probably get a 3% loan to buy a new car. That depreciates the day I drive it off the lot,” he said. “But I pay 8% for a loan that improves the value of my property and lowers my energy bill.”
One reason for the disparity, in his view, is that banks understand car loans. He said a state green bank can, among other things, provide expertise to encourage sustainable energy loans.
“We want to expand the market for clean energy finance for the private banks,” Rose said. “The idea of a green bank is certainly not to compete with the private banks. It’s rather to create a space for them to get more involved by designing products that are less risky for them to get involved with.”
The governor’s bill would establish an “energy independence fund” within the Alaska Industrial Development and Export Authority. His proposal includes a $10 million initial capitalization.
If the federal bill passes, it could send an estimated $130 million to Alaska’s green bank.