Turning Millions of Dollars into Billions for Renewable Energy, Energy Efficiency in Michigan
LANSING (March 16, 2016)—Creating a “green bank” in Michigan could help the state leverage $105 million in public funds to attract nearly $3 billion in private sector investments in renewable energy and energy efficiency over the next 15 years, according to analysis released today by the Union of Concerned Scientists (UCS).
“The Supreme Court’s procedural decision to hit pause on the Clean Power Plan doesn’t change the reality of climate change or the urgent need to curb our use of harmful, carbon-producing fossil fuels,” said Sam Gomberg, lead Midwest energy analyst at UCS. “Therefore, Michigan needs to find ways to reduce carbon pollution as cost-effectively as possible to ensure minimal impact on consumers. Creating a green bank is one way to do this.”
Green banks are state-funded financial institutions that use a pool of public funds and a suite of financial tools to attract a larger pool of private investments in clean energy projects. UCS analyzed the potential outcome of creating a green bank in Michigan, based on the experiences of existing green banks and clean energy lending programs in nearby Iowa and elsewhere. In addition to driving nearly $3 billion in private sector investments, by 2030 a green bank in Michigan could:
- Support the deployment of 685 megawatts (MW) of new solar power
- Save homes and businesses $322 million on their annual electricity bill through energy efficiency investments
- Reduce Michigan’s carbon emissions by 3.9 million tons per year—the equivalent of taking more than 740,000 cars off the road—or 13 percent of the emission reductions that Michigan must achieve to comply with the Clean Power Plan
Additionally, creating a green bank in Michigan would enable the state to direct investments where they are needed most. This could mean distributing funds to help communities hit the hardest by climate change impacts or pollution, or to aid coal communities in transitioning workers away from a declining industry towards one that is growing.
The full analysis, Green Banks: Transforming Clean Energy Finance in Michigan, can be found online.
“Michigan has a long history of using public initiatives to attract private capital, so creating a green bank to do just that isn’t a stretch,” said Gomberg. “With a relatively small state investment, Michigan can attract significant private capital. These funds will go far in helping the state transition to a clean energy economy, or meet its Clean Power Plan goals, while keep its energy supply reliable and affordable for consumers.”
You can view a related blog post on this analysis by Gomberg.