Center for American Progress

Establish a Federal “Green Bank” to Finance New Technologies
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Establish a Federal “Green Bank” to Finance New Technologies

A newly established Green Bank will lead to the steady and reliable creation of clean energy jobs and be a crucial element in the U.S. transition to an energy efficient, clean energy economy.

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New technologies face several unique obstacles along the journey from the laboratory to the commercial plant to our homes. After new technology has been developed, it must be prototyped and tested in a pilot program before it can be produced on a commercial scale. At this stage, new energy companies have yet to realize cost savings from experience and economies of scale. Banks and commercial lenders are reluctant to make loans to many of these projects, and while private investors have enthusiastically supported clean energy technology in the pilot phase, they lack the resources to fund multimillion or multibillion dollar construction projects to take these technologies to the commercial level.

Clean technology companies are therefore stranded between having enough capital to get started but not enough capital to begin commercial production.

A federally owned, not-for-profit Green Bank—sometimes referred to as a Clean Energy Deployment Administration, or CEDA—could provide financing to get technologies over this critical development hump. A newly established public CEDA—a financial entity with sufficient initial capitalization to invest in and accelerate the deployment of clean energy technologies across the United States in partnership with the private sector—will lead to the steady and reliable creation of clean energy jobs and be a crucial element in the U.S. transition to an energy efficient, clean energy economy.

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