The New Jersey Economic Development Authority on Monday said it issued a Request for Information seeking specific insights on financing availability and cost of capital challenges faced by New Jersey’s energy efficiency contractors to inform a potential new Green Fund bridge financing loan program.
The NJEDA is seeking responses from qualified entities including, but not limited to, capital providers, energy efficiency contractors, New Jersey natural gas and electric investor-owned utilities, nonprofit organizations, researchers and other industry/trade groups.
The NJEDA plans to launch the New Jersey Green Fund in the coming months, part of Gov. Phil Murphy’s administration’s Energy Master Plan in the Garden State. The fund would reduce greenhouse gas emissions and promote an inclusive clean energy economy by accelerating the deployment of proven clean energy technologies. Similar to green banks across the country, the Green Fund will specifically work on projects that are cost-effective and leverage private capital. This approach helps ensure that private financing markets for similar projects will develop over time.
New Jersey Office of Climate Action and the Green Economy Executive Director Jane Cohen noted that the new bridge financing loan program will make it easier for small contractors to access the resources they need to compete for projects in New Jersey’s clean energy space.
The Green Fund’s initial program is expected to help more commercial energy efficiency projects happen in New Jersey. Currently, many commercial energy efficiency projects utilize incentives provided to business facility owners by utility companies and the New Jersey Board of Public Utilities. The facility owners, in turn, assign these incentives to energy efficiency contractors to undertake the physical retrofit work. Because cash for many of these incentives is paid out only after a “performance period” of proven energy efficiency savings, the local contractors’ working capital is often tied up in projects they have already completed. The Green Fund is exploring programmatic options to ensure these contractors have access to sufficient capital, allowing them to take on more projects, grow their businesses and create more clean energy jobs.
The RFI seeks input on a “loan-to-lender” approach to solve this challenge. The program would make loans available to qualified lending intermediaries who would, in turn, use the funding to make incentive bridge working capital loans to energy efficiency contractors operating in New Jersey.
“The Green Fund will be a phenomenal tool to connect members of the clean energy sector with the tools to propel New Jersey away from dependence on fossil fuel and toward achieving Gov. Murphy’s goal of 100% clean energy by 2050,” NJEDA CEO Tim Sullivan said. “Firsthand input from clean energy stakeholders will help us to assess models for bridge financing that can support energy-efficiency contractors.”
The RFI can be found here. Responses to the RFI are due by Jan. 21.