$20 Million State Energy Financing Fund Launched
Financing Vehicle Unlocks Complementary State and Federal Funding for Capital Deployment to Projects that Reduce Emissions from the Built Environment
September 11, 2023
Governor Kathy Hochul today announced a $20 million State Energy Financing Fund for entities offering affordable financing for decarbonization projects that deliver benefits to disadvantaged communities. This financing vehicle provides a complementary funding opportunity for entities also applying to the U.S. Department of Energy Loan Programs Office Title 17 Clean Energy Financing Program’s Section 1703, to support capital deployment for projects in New York State that reduce emissions from the built environment, including buildings and other infrastructure. Today's announcement supports the Climate Leadership and Community Protection Act goals to reduce emissions 85 percent by 2050 and ensure at least 35 percent of benefits – with a goal of 40 percent – are directed to Disadvantaged Communities.
"The State Energy Financing Fund builds on New York’s continued efforts to lead the nation toward a cleaner and more sustainable future by supporting innovative projects that reduce emissions and help us meet our climate goals,” Governor Hochul said. “Through this fund, we are improving access to decarbonization projects in underserved communities across the state to help lower energy costs for New Yorkers and build a greener, more equitable future for all.”
Through the new program, administered by the New York State Energy Research and Development Authority (NYSERDA), direct capital support and credit enhancements are now available to entities actively working with or developing plans to apply to the LPO Title 17 Clean Energy Financing Program’s Section 1703 to deploy capital into decarbonization projects in New York State. NYSERDA seeks to support applicants that will provide loans or other forms of financing or direct support for clean energy and sustainable infrastructure projects, with a focus on projects that reduce emissions in buildings. Eligible projects must be decarbonization interventions that are designed to maintain or reduce customer energy bills, maintain or improve building comfort, and deliver resilient, durable solutions, or otherwise contribute to greenhouse gas emissions reductions.
Awards are contingent upon the applicant’s approval for the federal LPO Title 17 Clean Energy Financing Program’s Section 1703 financing. Funding will be awarded on a rolling basis and individual awards may not exceed the lesser of $5 million or 3 percent of an eligible applicant’s proposed project portfolio amount, subject to structuring terms and applicable federal, state, and local regulations. Applicants will be required to report on the number and dollar amount of investments into New York’s DACs funded through their respective Title 1703 facilities. More information about this funding is available on NYSERDA’s website.
NYSERDA President and CEO Doreen M. Harris said, “NYSERDA is pleased to add another decarbonization financing tool to its plethora of programs that support the advancement of innovative and commercially available clean energy technologies that reduce emissions while delivering benefits, such as lower energy bills and more comfortable living and work spaces, to underserved communities. By working hand in hand with our partners at the federal level, we are providing a joint pathway to lower the cost of capital for lenders to invest in clean energy technologies that will drive private sector investment and support an affordable energy transition.”
The DOE’s LPO Title 17 Clean Energy Financing Program issues loan guarantees to eligible innovative energy projects with a category for State Energy Financing Institution -supported projects that align federal energy priorities with those of U.S. States. The Program was recently updated to allow LPO loans for projects that also receive financial support or credit enhancements from a State Energy Financing Institution (SEFI). Through that update, states now have access to this new path to help deploy already commercialized clean energy and decarbonization technologies, while harnessing the power of collective state and federal funding sources to advance such projects. By providing loan guarantees to SEFI-supported projects like those that will be supported under NYSERDA’s new program, the LPO can now also offer project financing to a wider range of borrowers under Title 1703, including those serving or operating in small, rural, and underserved communities.
The State Energy Financing Fund is funded through the Regional Greenhouse Gas Initiative (RGGI).
New York State's Nation-Leading Climate Plan
New York State's nation-leading climate agenda calls for an orderly and just transition that creates family-sustaining jobs, continues to foster a green economy across all sectors and ensures that at least 35%, with a goal of 40%, of the benefits of clean energy investments are directed to disadvantaged communities. Guided by some of the nation’s most aggressive climate and clean energy initiatives, New York is on a path to achieving a zero-emission electricity sector by 2040, including 70% renewable energy generation by 2030, and economywide carbon neutrality by mid-century. A cornerstone of this transition is New York's unprecedented clean energy investments, including more than $35 billion in 120 large-scale renewable and transmission projects across the state, $6.8 billion to reduce building emissions, $3.3 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $2 billion in NY Green Bank commitments. These and other investments are supporting more than 165,000 jobs in New York’s clean energy sector in 2021 and over 3,000% growth in the distributed solar sector since 2011. To reduce greenhouse gas emissions and improve air quality, New York also adopted zero-emission vehicle regulations, including requiring all new passenger cars and light-duty trucks sold in the State be zero emission by 2035. Partnerships are continuing to advance New York’s climate action with nearly 400 registered and more than 100 certified Climate Smart Communities, nearly 500 Clean Energy Communities, and the State’s largest community air monitoring initiative in 10 disadvantaged communities across the state to help target air pollution and combat climate change.
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