Reduce Barriers to Clean Energy through Credit Enhancement
For much of the past 15 years, the growth in the clean energy industry has relied on the provision of grants, incentives, rebates, policy initiatives, and technical support from state clean energy programs. The federal government has also invested heavily in the clean energy sector, with loans, grants, and other subsidies for energy development made available through 10 different federal agencies. Unfortunately, a large percentage of the federal programs created to spur the production of clean energy have been overly restrictive and risk averse, sapping their ability to leverage appreciable private capital.
Although public funds have been essential in creating a market for clean energy production, the continued growth of this sector will be limited as long as it relies primarily on public subsidies. A more integrated approach is required; one that continues the important public role of providing incentives and technical support for the adoption of clean energy technologies, while at the same time providing public financial support in the form of credit enhancement to leverage private capital.
Introduce the Investing in Competitive Clean Energy (ICCE) Act
The ICCE Act would authorize, through a one-time $5 billion appropriation, the creation of a federal program that would leverage $25 billion of private investment in clean energy. ICCE would achieve a 5:1 leverage ratio by creating a variety of state credit support programs, including loan loss and debt service reserves, letters of credit, loan guarantees, collateral support, and subordinated debt. The program would be housed within the U.S. Department of the Treasury as it is fundamentally a development finance credit tool, not an energy programs mechanism. The ICCE Act legislation has already been drafted by CDFA and awaits Congressional introduction.
Read the 2017 Policy Agenda