The recently passed Inflation Reduction Act, which received no support from Republicans, allocates nearly $370 billion to address climate change, including $20 billion that will go to a newly created “national green bank” and then doled out for projects that reduce greenhouse gas emissions.
This could mean signifiacant progress in the pursuit of environmental justice across Greater Cleveland and the adoption of clean energy techology, whether solar panels or heat pumps, in communities where cost has long been a prohibiting factor.
Much of the money will go to a network of nonprofit green banks, which is expected to grow, but funds can also be directed to nonprofit community development financial institutions, said Reed Hundt, CEO of the Coalition for Green Capital, which organized the American Green Bank Consortium in 2011.
Regardless of who gets the money, the bulk of it is expected to target disadvantaged communities, he said.
Growth Opportunity Partners, a Cleveland-based, minority-run nonprofit with offices Midtown, created a green bank called the GO Green Energy Fund in 2020, using $4 million provided by the Gund Foundation.
The green bank meshes with Growth Opportunity Partners’ mission to provide capital and other forms of assistance to improve quality of life in low-to-moderate income neighborhoods and communities of color, said Growth Opportunity Partners CEO Michael Jeans, a 1992 graduate of Shaker Heights High School whose banking experience includes time spent with KeyBank and the former National City Bank.
“Our clientele are either led by people of color, women or they are benefiting communities that are characterized as disadvantaged,” he said
The goal of the GO Green Energy Fund will be to benefit low-income communities by delivering green energy to people and places that would otherwise be overlooked by a commercial bank, he said.
A good example might be installing solar panels in a field that would supply electricity to a low-income neighborhood and then arrange for the residents to own a stake in the project that they can then use as equity for future improvements, Jeans said.
Another example could be putting solar panels on top of local libraries and then selling the power to the surrounding homes, or partnering with Greater Cleveland Regional Transition Authority to provide electric buses, said John Mitterholzer, director of climate and environmental justice at the Gund Foundation.
Hundt, chairman of the Federal Communications Commission under President Bill Clinton, said money from the national green bank could also be used to provide heat pumps to low-income homes, where the reduction in greenhouse emissions would be just as great as for a high-income dwelling.
Mike Foley, director of sustainability at Cuyahoga County, said the county is proposing to seed the GO Green Energy Fund with an additional $1 million and that the green bank could help reduce the cost of adding green energy technology, such as solar panels and battery backups, to the county’s proposed micro-grid.
“It could do a lot of greenhouse gas reduction support,” Foley said of the federally allocated money. “That’s why I’m really excited about it.”
A lot of the details related to the national green bank, including what to call it, have yet to be determined, said Chris Moyer, spokesman for the Coalition for Green Capital. Several efforts to create a national green bank failed to get through Congress in recent years, he said, until finally finding success with the Inflation Reduction Act.
“There will be a governing structure like any nonprofit,” Moyer said of the national green bank, but it will take some months to establish.
Mitterholzer believes it’s possible that the Cleveland green back could eventually attract tens of millions of dollars in federal money if the community can come together “and help us make the case for those funds.”
The potential is substantial, he said. “I don’t think I ever could have imagined this kind of federal money.”
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