Banking on Green Energy

If climate change legislation in a post-Copenhagen U.S. Congress loses steam, maybe job creation will be the tonic that gives a final push to an ambitious plan to get clean energy investment rolling. For months a "renewable energy development bank" has been working its way through Congress - it's already in the Waxman-Markey bill better know for carbon restrictions - and could be adopted in 2010. I recently spoke to Todd Filsinger, who co-leads the efforts of the Coalition for the Green Bank, a proposed federally funded bank that would provide loan guarantees to emerging technologies in solar, wind, battery storage and other technologies.

"The whole purpose of the Green Bank is to get renewable energy and renewable energy infrastructure developed," Filsinger says. The expectation is that loan guarantees have the multiplier effect of creating 10 times the activity promoted by the dollar amount of each guarantee. According to estimates of the incoming Obama Administration when the stimulus bill was proposed earlier this year, a total investment of $110 billion would create almost 2 million direct jobs in renewable energy.The immediate goals are a little more modest.

The idea is pretty simple: the bank would be capitalized with $25 billion in public funds, and then would essentially be self-sustaining, covering operating expenses through its fees and interest payments. Better yet, as the payments are collected over time, the taxpayers would be reimbursed for the initial appropriation. The plan uses the model of the Export-Import Bank, the federally created bank founded in 1945 that assists manufacturing exporters develop overseas markets.

That bank says it doesn't compete with private lenders but rather "assume credit and country risks that the private sector is unable or unwilling to accept." Likewise, the Green Bank would guarantee loans in emerging technologies that private capital shuns, for now. A new, companion organization would identify promising technologies that are unable to attract private capital. This part of the puzzle, the Clean Energy Deployment Administration, would, in effect, be an early stage investor in these technologies.

The proposals are in versions of climate and energy legislation in both Houses of Congress, including the Kerry-boxer bill in the Senate. But what if Waxman-Markey is stalled? The simple answer is jobs. "We've had discussions with most members of Congress and there's widespread bi-partisan support," Filsinger says. He even thinks the concepts could be separated from Waxman-Markey if that turns out to be too controversial to gain passage in 2010. And then what? "We think we can get this up and running within 60 to 90 days of passage," he adds.

A who's who of the solar power industry, venture capitalists, legal and tax experts and a few utilities, are members of the coalition, with support from the American Wind Energy Association, General Electric, T. Boone Pickens' Pickens Plan and others. Filsinger of PA Consulting co-leads the coalition with former Federal Communications Commission Chairman Reed Hundt. And with unemployment hovering around 10 percent, how many Congress members would say no early next year?

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