Fairfax County is planning a ‘green bank’

Fairfax County is moving toward the establishment of a “green bank,” an entity that would facilitate the financing of clean energy projects.  

The green bank will boost the market for clean energy by providing the community with financial and technical assistance for energy efficiency, renewable energy, and electric vehicle projects

A bill passed by the 2021 Virginia General Assembly and signed by Gov. Ralph Northam in 2021 gave localities the authority to establish green banks.

Fairfax County’s green bank would operate independently as a nonprofit 501(c) (3) corporation, although the county would provide funding to get it started.

It would help the county meet its climate action goal to achieve community-wide carbon neutrality by 2050 by financing renewable energy projects. It would also stimulate the economy by creating thousands of new jobs.

John Morrill, the acting director of the Office of Environmental and Energy Coordination presented recommendations on how the green bank could be structured and how it could operate at a July meeting of the Board of Supervisors’ Environmental Committee.

A proposed timeline calls for a public hearing in October or November on a proposed ordinance to authorize the filing of articles of incorporation for a green bank.

A memorandum of understanding between BoS and the green bank entity would be executed in mid-2024, Morrill proposed. The bank would begin operations in mid to late 2024.

The Board of Supervisors would need to address several policy issues, including the selection and composition of the green bank’s board of directors and the extent to which the board would review lending activity.  

Morrill explained the rationale for creating a green bank: “To avoid the worst-case climate scenario, the nation and Fairfax County require a tremendous reinvestment in energy efficiency, the widespread deployment of renewable energy technology, and the rapid transition to electric vehicles.”

“The mission of a Fairfax County green bank is to leverage relationships and private capital to develop a clean energy economy,” Morrill said. And that includes access to clean energy for everyone countywide, including vulnerable communities.

“Decades of experience have shown that financial incentives alone, including the availability of funds, are not sufficient to achieve change,” Morrill said.

“Energy costs remain a low priority for many consumers and businesses,” he said. And when consumers are interested, they find it hard to sort through the various claims by clean energy companies, often resulting in uncertainty and inaction.

Morrill said green banks would overcome that obstacle by serving as a “trusted broker or concierge” between customers and clean energy companies, contractors, service providers, and lenders.  

In the early stages, the green bank would focus on stimulating local market demand. The initial startup funds, mostly from a U.S. Department of Energy grant to Fairfax County, would be used to establish the entity and promote the use of federal and state rebates and tax credits.

In the future, the green bank could provide credit support for more significant energy efficiency and renewable energy projects and direct loans for residential and commercial projects.

The long-term goal is for the green bank to become independent and self-supporting. County control would decrease over time as the green bank matures and its balance sheet grows.

Having this entity become independent is “absolutely critical,” said Board of Supervisors Chair Jeffrey McKay. “We need to seize on this opportunity. We need to keep this momentum going.”