$1 billion "green bank" would invest in clean tech projects
Late last year, the Cuomo administration laid out its agenda to address New York’s future energy requirements. All this week, reporters from the Innovation Trail are putting different parts of that complex energy puzzle under the microscope.
More energy-efficient technologies, from water heaters to wind turbine, have been coming onto the marketplace for decades.
But the decision on whether to use greener components to choose or replace those hot water heaters in an apartment building will often come down to cost. And the fact that the older technologies are usually cheaper is a constant challenge to the producers of newer energy-efficient products.
One company that faces that challenge is NuClimate, a heating and cooler systems maker based in East Syracuse. The company started as a spin-off of Carrier Corp., the company that invented air conditioning, in 1984.
Business in recent years has been good for NuClimate, according to vice president John DiMillo. They recently won a contract with New York City public schools for a major renovation project the city is undertaking.
Still, DiMillo says it's a constant struggle for NuClimate to convince contractors to go with their product. He says some additional incentives and state-backing could come in handy.
"Contractors are faced today with a more competitive bidding process than ever before and so because of that they’re forced to bid very low on jobs and then figure out how they’re going to make money afterwards," he says of the trade.
That means contractors often pick the older, less efficient option as a way to save costs.
DiMillo says a public fund that could defray some of the costs for contractors if they chose more energy efficient options, could make his company even more competitive.
And that’s essentially the goal of Gov. Andrew Cuomo’s proposed $1 billion "green bank": to increase the use of energy-efficient products. That could include everything from home water heaters to giant wind turbines.
If the idea makes it through the budget process, the state won’t be totally flying blind as it works to set the bank up. Cuomo pointed to Connecticut - the first state in the country to start a green bank - as a model.
The Connecticut Clean Energy Finance and Investment Authority, or CEFIA, was formed in 2011.
David Goldberg, the director of external relations for CEFIA, says the goal of a green bank, put simply, is to invest taxpayer money into a clean energy project in the hope it’ll attract a larger sum of private investment.
Goldberg says the idea of a green bank was met with wide support in his state.
"It’s a nonpartisan at worst and a bipartisan at best matter because the idea of using these monies in a more effective and efficient way to not only attract the private capital, but to use that in a manner that will provide the opportunity to make smart energy choices," he says.
Goldberg points to a smart loan program about to get underway that’ll use $18 million in state and federal money, combined with $80 million in private money.
Exactly how New York’s green bank will be funded is unknown. The governor’s budget says it’ll utilize resources from the New York Power Authority and NYSERDA, the state’s energy research arm.
Goldberg says CEFIA draws money from a combination of grants and tax dollars. The bank also has the ability to pass bonds.
Decisions on how New York’s green bank will be run will be up to Richard Kauffman. Cuomo tapped Kauffman early this year to join his cabinet as Energy Czar.
Kauffman is a former advisor at the U.S. Department of Energy. In a speech shortly after taking on the new role, Kauffman laid out some of the obstacles clean tech companies face in New York, notably too much regulation and a limited access to capital.
Ed Bogucz says it was a bit of ‘coup’ for Cuomo to snatch Kauffman from Washington.
As the director of Syracuse’s Center of Excellence for sustainability, Bogucz works with companies developing new energy-efficient projects.
"The opportunity of creating a green bank to support investments that are going to have these paybacks to rate payers and to municipalities is really a tremendous thing," he says of the possible green bank.
Bogucz describes the competitive obstacle many clean tech companies face in the marketplace as a chasm.
"If they don’t leap across the chasm, then they wind up not achieving their potential for sales."
He says the green bank will help those new products gain acceptance and compete with their more traditional competition.
No doubt, Kaufman’s experience in the financial markets will also be called on, if the fund is to deliver on its ambitious agenda.