Mary Barber and Jeff Schub

Last year was a breakthrough for New Jersey’s push toward a clean energy future. In May, Gov. Phil Murphy signed the Clean Energy Act that promoted zero carbon electricity and an executive order launching New Jersey’s Energy Master Plan. The executive order provides the state with a roadmap to draw 100 percent of its electricity from clean sources by 2050 and meet 50 percent of its electricity needs from renewable sources by 2030.

But if 2018 was the year where our clean energy road map was unveiled, 2019 needs to be the year we get rolling. And establishing a New Jersey Green Bank would be an incredible boost.

Green Banks are mission-driven clean energy financing entities that use innovative financing tools and underwriting criteria to address gaps and grow markets. For example, a Green Bank might provide a credit enhancement to encourage traditional lenders to enter a new market, such as community solar or residential energy efficiency lending. Green Banks have driven approximately $3 billion in clean energy investment and have helped transform markets in several U.S. regions.

Murphy’s economic development plan includes a commitment to explore the creation of a Green Bank. But New Jersey doesn’t need to explore it. It needs to create it.

Some early Green Banks, including New York’s and Connecticut’s, were formed as public entities and seeded with significant public funding. More recently, a new model has emerged – an independent, non-profit Green Bank that doesn’t require significant public funding but has the strong support of, and sometimes some governance from, local or state governments. This approach is used in Maryland, Nevada and Colorado, and would allow New Jersey to reap the benefits of a Green Bank without a massive injection of public money.

Though a huge financial investment wouldn’t be necessary, a strong commitment from the state of New Jersey would be. Like all financial institutions, Green Banks thrive when investors and borrowers have confidence in long-term performance and potential. If New Jersey were to commit to a non-profit Green Bank as a central component of its aggressive clean energy agenda, lenders and borrowers could have confidence in the long-term viability of the market. Meanwhile, proponents of New Jersey’s clean energy plan would have a robust and reliable funding mechanism for the myriad investments we need to make the plan a reality.

A non-profit Green Bank is a low-risk, high-reward solution for New Jersey. A full-throated endorsement from Gov. Murphy would be heard loud and clear in boardrooms across the country and could spark the clean energy revolution we’re all working toward.

Mary Barber is Director, Clean Energy at Environmental Defense Fund. Jeff Schub is the Executive Director at Coalition for Green Capital.