Unlocking the Equitable Clean Energy Future with Inclusive Financing
Illinois’ communities of color and disadvantaged communities are ready to lead the just transition from the fossil fueled past to the clean energy future. But the same systems of oppression that have excluded these communities from wealth-building opportunities in the past remain barriers to the clean energy economy today. Without thoughtful, targeted action, Illinois is at risk of recreating inequitable systems on our way to climate solutions. This is why we need inclusive financing mechanisms that will reduce barriers to entry for Black and brown contractors and counteract discriminatory lending practices for environmental justice and low-income communities. Fortunately, the legislative proposal currently before our elected leaders in Springfield would create two new entities tasked with ensuring equitable climate finance.
One entity – called the Green Bank in the proposed legislation – tasks the Illinois Finance Authority with issuing bonds and exploring new ways of financing clean energy and climate solutions across the board, with a mandate to focus on equity and access. Doing so will unlock new opportunities for clean energy solutions, but also other intensifying climate-related crises related to drinking water and wastewater infrastructure.
The other entity – the Illinois Clean Energy Jobs and Justice Fund – is laser-focused on equitable outcomes in the deployment of clean energy. The bill creates a new non-profit lending institution that is prepared to do what it takes to eliminate disparities and support Black and brown entrepreneurs. It would create new no- and low-cost loan products that can support low-income families in making their homes warmer and their energy bills more affordable. It can unlock additional capital by emboldening private lenders to make low-income energy investments that they inaccurately label high-risk. Most importantly, it will stay focused on its guiding principles: reduce disparities and achieve distributional justice.
We’ve seen similar entities in other states catalyze explosive growth of clean energy resources, with some taking key strides towards inclusive access to rooftop solar. Only four states have a median income of rooftop solar customers that’s lower than the statewide median income, meaning that a new solar customer is more likely to be lower income than higher income. Connecticut is one of those states, thanks to their inclusive finance innovations that leveraged $5 of private capital for every $1 of public capital. Illinois is not one of those states. We could be.
Illinois has an opportunity to leapfrog from laggard to leader when it comes to inclusive climate and clean energy financing. These two entities will also create the perfect vessel for receiving federal funding through upcoming infrastructure legislation making its way through Congress. Having these state-based entities in place will ensure that our share of the $100 billion currently earmarked for a national Clean Energy and Sustainability Accelerator will go where it’s needed most and be deployed to maximum effect.
The Senate convenes tomorrow. The House on Wednesday. Please call your elected officials now and urge them to pass the Governor’s proposed legislation.