To address the climate crisis, some 6.8 million New York households will soon need to transition to electric heating or low-carbon fuels. Of those, an estimated one million are low- and moderate-income households in buildings with five or more units. Most of that housing is in New York City and is subject to Local Law 97.
Last year, the Federal Reserve Bank of New York released a report titled Sustainable Affordable Housing: Strategies for Financing an Inclusive Energy Transition. According to the report, “New York State’s Climate Action Council estimates that annual investments in energy upgrades statewide will grow from roughly $5 billion in 2030 to $30 billion in 2050. Complying with New York City’s Local Law 97, which lays out a series of deadlines beginning on January 1, 2024, will require expensive upgrades. Failing to comply puts building owners at risk of substantial penalties.”
NYS CDFIs can play an important role in this transition.
The New York Green Bank (NYGB), a division of the New York State Energy Research and Development Authority (NYSERDA), is encouraging New York State CDFIs to apply for low-cost lending capital through its Community Decarbonization Fund, announced in April 2023. The $250 million fund was established to address barriers to accessing capital for clean energy projects in historically underserved communities.
Community Development Banks, Credit Unions, Loan Funds and Venture Capital Funds, as well as certain specialty lenders, are invited to apply for loans of between $2 million and $25 million at a 1.5% fixed interest rate over a 12-year term.
Borrowers may use funds for new construction or retrofits to existing buildings if the project meets the eligibility criteria. Beyond housing, CDFIs may use the fund to capitalize loans to small and local businesses in disadvantaged communities that support building decarbonization, such as contractors installing eligible technologies in eligible projects.
Building Electrification and Supporting Measures include but are not limited to:
Heating and Cooling Load Reduction
Heat recovery ventilation
Clean Heating Technologies
Air Source Heat Pumps
Water Source Heat Pumps
Ground Source Heat Pumps
District thermal interconnection
Electric Vehicle Infrastructure (including charging stations)
Thermal and Electric Energy Storage
On-site Solar serving customer load when combined with one or more of the above listed Eligible Technologies
NY Green Bank will consider other technologies that reduce greenhouse emissions, beyond those listed above. The Scoring Committee will assess whether a given technology is supporting New York State climate policy goals.
NY Green Bank is a New York State-sponsored investment fund dedicated to filling financing gaps in clean energy and sustainable infrastructure markets. Their investments contribute to greenhouse gas emissions reductions, energy efficiency, clean energy generation, and the mobilization of private capital in key market sectors. As the largest green bank in the nation, they are mission-driven and utilize financing solutions to accelerate the clean energy transition.