Connecticut’s pioneering model for publicly owned, small-scale solar

Over the past decade or so, the Connecticut Green Bank, the first green bank in the United States, has taken on an unusual role — that of a ​“public developer” of solar projects for schools, cities, and low-income housing across the state.

“There are all sorts of public institutions that take in public money and give a loan, a grant, and that’s all they do,” said Jason Kowalski, executive director of the Public Renewables Project. ​“This is completely different in what it can achieve.”

Though the approach is unusual for a public entity, it needn’t be, Kowalski said. In fact, it is a model that cash-strapped state governments should consider closely as federal clean-energy tax credits disappear and energy costs rise. That’s particularly true for the 16 states, plus the District of Columbia, that have created a government-backed or nonprofit green bank since Connecticut first launched its version in 2011.

The bank’s program targets sectors that private lenders and solar developers might shy away from because of perceived credit risks or low returns on investment, Kowalski explained. It taps into low-cost financing available to state entities and builds portfolios of projects to achieve economies of scale.

Then the revenues generated from those projects are ​“recycled”: used to expand the pool of capital from which it can make loans for other projects that help achieve Connecticut’s clean energy and environmental justice goals.

While some private-sector solar industry players may see the Solar MAP+ approach as infringing on their turf, state-backed agencies ​“see it as expanding the role of the private-sector installation business,” Kowalski said.

That’s certainly the case for the school solar projects that Solar MAP+ has built, said Tish Tablan, senior program director at Generation180, a clean energy advocacy group.

A September report by Tablan’s and Kowalski’s groups and the Climate Reality Project found that Connecticut — the third-smallest state by land mass and 29^th in population — ranks fifth in the country for total solar capacity installed on K–12 schools and second (behind Hawaii) in the percentage of K–12 schools with solar.

The same model can help schools and public buildings do more than solar, Tablan added. ​“We can look at electrification, we can look at heat pumps, we can look at solar-plus-storage, we can look at microgrids.”

This kind of financial support is increasingly important as the Trump administration cancels federal funding for clean energy projects more broadly, and in disadvantaged communities in particular, Tablan and Kowalski said. That includes the administration’s move to claw back $20 billion in federal ​“green bank” funds meant to promote precisely this kind of public-sector finance, which is now being challenged in court.

The evolution of Connecticut’s Solar MAP+ program 

Solar MAP+ evolved largely as a response to gaps in the state’s broader solar market, said Mackey Dykes, the Connecticut Green Bank’s executive vice president of financing programs.

The same 2011 law that launched the bank also created state solar incentives meant to boost development across multiple sectors of the economy, Dykes said. ​“But there were some areas where we didn’t see a lot of activity. We sat down and started to figure out why that was.”

The first targets were state agencies that were lagging in solar development, despite their access to relatively low-cost capital, he said. This indicated that incentives alone weren’t the solution. It turned out that those agencies ​“needed help with documentation structures, with procurement, with project labor agreements,” he said. ​“We put that together, and projects started happening.”

“Then we realized we built this Swiss Army knife of tools that we could bring to bear in other sectors where there were gaps in solar deployment,” Dykes said. The Connecticut Green Bank also started looking at municipalities that were lagging in using solar incentives, particularly smaller towns, he said. At around the same time, he noted, ​“we realized the solar incentive program in the state was undersubscribed for school projects,” and they set out to fix that.

Bundling multiple school projects can help lower costs. Dykes cited the example of a 67-kilowatt system at an intermediate school in Portland, Connecticut. ​“You’d have trouble attracting attention for a project that small,” he said. ​“When you combine it with dozens of projects, and have developers competing with a pool of projects, the projects become more feasible,” with the Connecticut Green Bank serving as a clearinghouse for hiring installers and securing financing at a larger scale.

Tablan highlighted the similarities with Generation180’s work with schools. ​“If you ask any public-sector entity, they’re going to say budget and cost are the first concerns,” she said. Most of the country’s school solar projects have been developed via third-party ownership models, and ​“Connecticut Green Bank has taken that approach” as well, she said.

Can the public developer model expand? 

The wraparound services that Solar MAP+ offers bring more than money to the equation, said Advait Arun, senior associate for capital markets at the Center for Public Enterprise. The nonprofit think tank uses the term ​“public development” to characterize the way public entities can expand beyond financing to include ​“all of the steps in a project development pipeline,” including ownership, operations, and maintenance.