Dive Brief:
- The Biden administration on Tuesday sketched out plans to make almost $27 billion available for clean energy and climate projects through a Greenhouse Gas Reduction Fund authorized by the Inflation Reduction Act, with a focus on minority and low-income groups.
- The U.S. Environmental Protection Agency said it will open two competitions this summer to distribute the funding: a $20 billion General and Low-Income Assistance Competition and a $7 billion Zero-Emissions Technology Fund Competition.
- Initial plans call for making the $20 billion available through between two and 15 grants to eligible non-profits, though EPA officials say they remain open the idea of tasking a national entity to distribute the funding.
Dive Insight:
EPA’s announcement Tuesday was a setback for the Coalition for Green Capital, which had lobbied to be a national administrator of the clean energy funding program. Nonetheless the nonprofit, which advocates for the development of regional green banks, celebrated EPA’s announcement.
“CGC applauds EPA for launching the award of grants under the historic [Greenhouse Gas Reduction Fund],” Reed Hundt, chairman and CEO of the Coalition for Green Capital, said in a statement. In particular, the group believes the program will have widespread benefits in communities across the country by deploying projects to reduce or avoid greenhouse gas emissions.
Green banks are financial institutions that work to finance clean energy solutions and technologies. Proponents of a national green bank say it could help accelerate the energy transition across the country, while others argue smaller, regional organizations can best help distribute funds to underserved communities.
EPA officials on Tuesday told reporters they remain open to a single national entity acting as a green bank.
“At this juncture, there’s just no reason for us to take any options off the table and box ourselves in,” EPA Administrator Michael Regan said in a briefing reported on by Bloomberg.
“For years, we’ve fought to take the idea of a national climate bank from a vision to a reality. With today’s action from the EPA, we’re one step closer,” Senator Chris Van Hollen, D-Maryland, said in a statement.
As part of the Zero-Emissions Technology Fund Competition, EPA said it will award $7 billion in competitive grants to states, tribes, municipalities and eligible nonprofit entities for residential rooftop solar, community solar and associated storage. The agency said it expects to award up to 60 grants under this competition.
“I’m thrilled with the progress EPA has made so far in getting this critical program off the ground,” Rep. Frank Pallone Jr., D-N.J., said. The grant programs will create jobs and bring “affordable, homegrown clean energy to communities across the country.”
Entities receiving part of the $20 billion fund can include non-profits “designed to provide capital, leverage private capital and provide other forms of financial assistance” to deploy low- and zero-emission technologies and services, the agency said.
“Together, these entities will leverage public dollars with private capital to invest in projects that reduce pollution and lower energy costs for families, particularly those in the low-income and disadvantaged communities that have had unequal access to private capital for far too long,” EPA said.
EPA also announced it will host a “national Community Roundtable series” to continue discussions around how the Greenhouse Gas Reduction Fund will operate and what projects it will fund. The agency said it anticipates publishing a notice of funding opportunity for both grant competitions early this summer.
