Monday’s blog post, “Lessons from New York’s phony green bank,” questioned the efficacy of New York’s transition to a clean energy economy and, in particular, took aim at one of our marquee initiatives, the NY Green Bank. I would like to take this opportunity to address some points often raised by clean energy critics, and set the record straight on the NY Green Bank.
Skeptics frequently claim that the renewable energy sector cannot create a meaningful number of employment opportunities. A quick look at the solar industry alone demonstrates that clean energy is in fact a job creator. The U.S. solar industry has more workers today than either the coal mining industry or the steel industry. Nationally, these 120,000 solar jobs are just one part of the broader clean energy industry that also includes wind, energy efficiency services, fuel cells, batteries, and a range of other clean energy solutions. And this is just the beginning.
The post repeats the old saw that renewable energy must not be a wise investment since it requires government intervention to be cost competitive, without providing any context. Government has traditionally invested in key industries (railroad, jet aircraft, computer technology) to improve their cost competitiveness until they have achieved scale. The conventional energy industry has long enjoyed such support; today’s energy market is not a level playing field. To this end, the clean energy industry warrants continued support, and as a result of efforts to date, we are already witnessing rapidly declining renewable energy costs. For example, here in New York we expect solar costs to be at grid parity in less than five years.
The blog poses the question, “Why aren’t the nation’s banks…exploring these opportunities?” In short, banks are interested in lending to the clean energy sector, but due to regulatory and other market barriers, have not been able to efficiently deploy capital for clean energy projects. Over the past six months the New York State Public Service Commission (PSC) undertook an extensive public review and comment process for the NY Green Bank. The PSC received over 90 public comments (which are available to the public on the PSC website) including letters of support from a wide spectrum of private sector financial institutions, including major banks.
Finally, there is no “double-talk” in the assertion that New York’s new energy policy is focused on enabling self-sustaining private markets and reducing dependence on subsidies. By relieving market barriers across the spectrum from demand origination to financing, New York will enable the market to function, decreasing the need for subsidies. With a vibrant market, the clean energy industry can achieve scale while costs will continue to decline.
Take a closer look at what we are doing here in New York. With the NY Green Bank operating in concert with other policies that we are adopting, New York consumers can look forward to a cleaner, more resilient and affordable energy system that will rely upon markets without ratepayer subsidies.
Kauffman is chairman of Energy and Finance for New York.