Program will promote equity by improving access to financial resources for small contractors
The New Jersey Economic Development Authority (NJEDA) announced that it has issued a Request for Information (RFI) seeking answers to questions about the financing challenges faced by local energy efficiency contractors. The NJEDA plans to launch the New Jersey Green Fund (Green Fund) in the coming months, part of the Murphy Administration’s comprehensive approach to accelerating the growth of an equitable clean energy economy in the Garden State. The RFI seeks specific insights on financing availability and cost of capital challenges faced by New Jersey’s energy efficiency contractors to inform a potential new Green Fund bridge financing loan program. The RFI can be found at https://www.njeda.com/bidding/#gfbridgerfi. Responses to the RFI are due by January 21, 2022.
The NJEDA is launching the Green Fund as outlined in the State’s 2019 Energy Master Plan and current three-year Regional Greenhouse Gas Initiative Strategic Funding Plan. The Fund will reduce greenhouse gas emissions and promote an inclusive clean energy economy by accelerating the deployment of proven clean energy technologies. Similar to green banks across the country, the Green Fund will specifically work on projects that are cost effective and leverage private capital. This approach helps ensure that private financing markets for similar projects will develop over time.
New Jersey Office of Climate Action and the Green Economy Executive Director Jane Cohen noted that the new bridge financing loan program will make it easier for small contractors to access the resources they need to compete for projects in New Jersey’s clean energy space.
“Due to initiatives and policies put in place during Governor Phil Murphy’s first term, we anticipate seeing a significant increase in energy efficiency contracting activity over the next three years,” Cohen said. “Having a go-to resource that small contractors can draw from to help fund projects helps our state accelerate plans to reduce its reliance on fossil fuels and grow an equitable green economy.”
The Green Fund’s initial program is expected to help more commercial energy efficiency projects happen in New Jersey. Currently, many commercial energy efficiency projects utilize incentives provided to business facility owners by utility companies and the New Jersey Board of Public Utilities. The facility owners, in turn, assign these incentives to energy efficiency contractors to undertake the physical retrofit work. Because cash for many of these incentives is paid out only after a “performance period” of proven energy efficiency savings, the local contractors’ working capital is often tied up in projects they have already completed. The Green Fund is exploring programmatic options to ensure these contractors have access to sufficient capital, allowing them to take on more projects, grow their businesses, and create more clean energy jobs.
The RFI announced today seeks input on a “loan-to-lender” approach to solve this challenge. The program would make loans available to qualified lending intermediaries who will, in turn, use the funding to make incentive bridge working capital loans to energy efficiency contractors operating in New Jersey.
The NJEDA is seeking responses from qualified entities including, but not limited to, capital providers, energy efficiency contractors, New Jersey natural gas and electric investor-owned utilities, non-profit organizations, researchers, and other industry/trade groups.
“The Green Fund will be a phenomenal tool to connect members of the clean energy sector with the tools to propel New Jersey away from dependence on fossil fuel and toward achieving Governor Murphy’s goal of 100 percent clean energy by 2050,” said NJEDA Executive Officer Tim Sullivan. “First-hand input from clean energy stakeholders will help us to assess models for bridge financing that can support energy-efficiency contractors.”
All RFI responses must be submitted in writing no later than 11:59 PM EST, on Friday, January 21, 2022 via e-mail to: NJGreenFundRFI@njeda.com. The subject line of the e-mail should state: RFI Response-2021-RFI-CE-139: Bridge Financing for NJ Energy Efficiency Contractors.
All questions concerning this RFI must be submitted in writing no later than 11:59 PM EST, on Friday, January 7, 2022 via e-mail to: NJGreenFundRFI@njeda.com. The subject line of the e-mail should state: “QUESTIONS-2021-RFI-CE-139.” Answers to questions submitted will be publicly posted on the Authority’s website on or about January 11, 2022 at: https://www.njeda.com/bidding/#gfbridgerfi as Addendum.
The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.