![](\"https:\/\/techcrunch.com\/wp-content\/uploads\/2023\/12\/GettyImages-1163558463.jpg?w=600\")
\n\t\t<\/div>\n<\/p><\/div>\nFor years, banks have been financing large renewable power projects, from utility-scale solar farms to horizon-spanning wind farms. But smaller projects, like installing a heat pump in someone\u2019s home or retrofitting affordable housing, often get passed over. They simply haven\u2019t been lucrative enough.<\/p>\n
But the demand is there, which is why advocates have been clamoring for the federal government to support a so-called green bank, which will underwrite these sorts of projects.<\/p>\n
That green bank is now a reality. On Thursday, the EPA announced<\/a> that it had awarded $20 billion in grants from the Inflation Reduction Act<\/a> to eight organizations that will use the money to make loans that will help with those projects.<\/p>\n \u201cIt\u2019s a chance to prove that this works and creates real benefit on the ground for people across America,\u201d Dawn Lippert, founder and CEO of Elemental Excelerator<\/a>, told TechCrunch, adding that \u201ctribal communities, rural communities, low income and disadvantaged communities are really the focus here.\u201d<\/p>\n Indeed, over $14 billion of the funding will go toward communities that fit those descriptions, the EPA said.<\/p>\n What\u2019s more, since the money is to be used for loans, it can be recycled once those loans are paid off. Green bank loans have a pretty good track record, too. The Connecticut Green Bank, for example, has a delinquency rate that\u2019s on par<\/a> with other commercial lenders<\/a> across both residential and commercial portfolios.<\/p>\n In addition to providing financing for energy upgrades, the Greenhouse Gas Reduction Fund, as it is known, is hoping to attract $7 in private capital for every dollar it disperses. In fact, that might be a conservative figure: McKinsey expects<\/a> the new green bank should attract more than $12 of private investment per dollar on its balance sheet.<\/p>\n The U.S. is expected to need $27 trillion by 2050 to hit net zero carbon emissions, McKinsey estimates, which might make the green bank\u2019s $20 billion seem small. But its ability to spur private investment and the fact that it\u2019s not a one-time grant should allow it to have an impact that extends beyond its initial bottom line.<\/p>\n Founders and investors should see some benefit, too. Though the money is aimed mostly at consumers and small businesses, equity investments are a possibility, Lippert said. Plus, the funding should juice demand for technologies that have been proven and are ready for commercial deployment.<\/p>\n For those that aren\u2019t yet, the green bank\u2019s loans should have a cascading effect, sending a signal upstream to founders and investors that there are markets for consumer-level climate tech that works for low-income and disadvantaged communities.<\/p>\n \u201cThis $20 billion of funding is going to have a really significant impact on creating jobs, reducing costs for American families, creating a healthier, safer future for our children,\u201d Lippert said.<\/p>\n<\/p><\/div>\n