Gov. Gretchen Whitmer wants to infuse $5 million into a state green bank and spend another $5 million on a revolving fund for clean energy projects at state facilities.
The $10 million in clean energy spending is part of Whitmer’s $61.9 billion fiscal year 2021 budget proposed on Thursday.
State officials say the spending is meant to encourage lenders to give favorable rates to residents and businesses for renewable energy improvements through Michigan Saves Inc., the state’s “green bank.”
“By providing a credit enhancement to lenders, the green bank incentivizes lenders to provide more favorable rates and terms for renewable energy improvements benefitting property owners and the environment,” according to Whitmer’s budget proposal.
The nonprofit Michigan Saves was created in 2009 and has financed more than $230 million in energy efficiency and renewable energy projects through low-interest loans. Officials have set an ambitious goal of $1 billion of investment by 2023. The program has financed 19,113 residential and 1,293 commercial projects. Nearly 450 of those were for solar installations.
Initially funded by $10 million from Michigan’s 2008 renewable energy law and the American Recovery and Reinvestment Act of 2009, Michigan Saves maintains a loan loss reserve that reduces the risk for lenders.
In recent years, Michigan Saves has sought funding to increase the loan loss reserve, previously telling MiBiz that each dollar in the reserve has resulted in $30 of private investment. The program has grown about 30 percent each year, according to Michigan Saves President and CEO Mary Templeton. The $5 million would be a one-time investment.
“We commend Governor Whitmer’s recommended investment in Michigan Saves as part of the administration’s efforts to support a cleaner environment in Michigan,” Templeton said in a statement. “Affordable energy-efficiency and renewable energy improvements are key components to creating a clean energy landscape that all Michiganders can participate in and benefit from, and our credit enhancement model is a powerful financing solution supporting that goal.”
Meanwhile, Michigan Congresswoman Debbie Dingell has introduced legislation to create a national green bank that would leverage $35 billion in federal funds over six years to stimulate up to $1 trillion in private spending to address climate change. The national bank would be modeled off of Michigan’s program.
Whitmer’s budget proposal also includes $5 million for a “green revolving fund” for energy efficiency and renewable energy projects at state buildings. The fund would “allow for the re-investment of funds generated from long-term cost savings in new projects and establish a long-term program focused on reducing the state’s carbon footprint,” according to the proposal.
The green bank and revolving fund show the Whitmer administration’s ongoing efforts to address climate change.
Although Michigan’s renewable energy standard levels off next year at 15 percent, and it remains unclear whether that will be extended, Whitmer has taken several administrative actions on climate change, including committing Michigan to emission reduction targets laid out in the Paris climate agreement and appointing two commissioners to the Michigan Public Service Commission with backgrounds in clean energy advocacy.
Later this year, Whitmer is expected to make another climate-related announcement with either clean energy or carbon-reduction targets for the coming decades.
EDITOR’S NOTE: This story has been changed from its original version.