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The Environmental Defense Fund (EDF) has released a report detailing clean energy financing options that could help advance Governor-elect Phil Murphy’s 100 percent clean energy goals. The report, Financing New Jersey’s Clean Energy Economy: Pathways for Leadership, produced by the Coalition for Green Capital and Quantified Ventures for EDF, is a roadmap for accelerating the deployment of renewable energy, energy efficiency and clean transportation in the state.
New Jersey has made notable strides to increase renewable energy generation throughout the state, including offshore wind and solar. While these efforts have led to the Garden State having the 5th most installed solar capacity of any state, only 5 percent of New Jersey’s electricity is generated from renewable sources, far below the national average. Solar and wind power are sleeping giants of economic potential, with solar alone representing a $40 billion investment opportunity that could help bring down the cost of residential power for New Jerseyans who currently pay more for electricity than 41 other states in the U.S. The yet untapped offshore wind potential of 300 terawatt-hours/year is far greater than the entire state’s current consumption.
“Governor-elect Murphy’s goal to catalyze New Jersey’s clean energy economy is possible with the right policies," says Mary Barber, director of New Jersey Clean Energy at Environmental Defense Fund. "The opportunity lies in combining existing programs or institutions with specific financing tools to attract private capital and finance a clean energy future. A dedicated institution, created new or by expanding current entities, would do just that to accelerate market-ready solutions – and lead us closer to achieve state goals.”
Given the scale of investment required to meet New Jersey’s energy and efficiency goals, the state will need to leverage private investor capital to accelerate the deployment of its investments in renewable energy, energy efficiency and clean transportation. With transportation accounting for 50 percent of the state’s emissions, the deployment of electric vehicles and associated infrastructure represents an additional compelling investment opportunity that can drive down emissions and improve air quality. Fortunately, innovative financing approaches demonstrate the potential for smart state policies to catalyze renewable energy markets. In just five years, New York’s Green Bank has enabled nearly $1.4 billion in investment, leveraging $3-4 of private capital for every public dollar invested.
“Community solar, once implemented by the legislature, has the potential to open the solar economy to all New Jerseyans," says Hannah Masterjohn, vice president of policy and regulatory affairs of the Clean Energy Collective. With the addition of a clean energy financing authority such as a state bank, we can ensure that community solar can deliver on Governor Elect Murphy’s promise of a ‘stronger, fairer economy that works for every family.”
Successful green financing programs in the United States and the UK have accelerated clean energy expansion, reduced energy costs, and spurred job growth. In applying the lessons learned from existing financing systems, the report recommends that New Jersey consider:
“Green financing solutions can be tailored to fit specific states," says Bryan Garcia, president and CEO of the Connecticut Green Bank. "Through the Connecticut Green Bank, we attracted $7-10 of private investment for every public dollar spent. This example demonstrates the opportunity for public-private partnerships to reduce the burden of energy costs on families and business.”
“This year’s devastating storm season should serve as a sharp reminder of the importance of a resilient energy system," says Dakota Gangi, sustainable finance manager at EDF+Business. EDF’s new report provides critical analysis for determining the best path forward to grow New Jersey’s clean energy economy and secure a smarter energy future by leveraging public resources to mobilize private investment,” said
The report assesses New Jersey’s existing mandate, rebate and investment programs, including: the Environmental Infrastructure Trust (EIT); New Jersey’s Clean Energy Program; Property Assessed Clean Energy (PACE); and the renewable portfolio standard (RPS). Financing tools such as Green Bonds, Environmental Impact Bonds, and Qualified Energy Conservation Bonds are evaluated as mechanisms for attracting global private investment.