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Green banks gain ground in liberal communities struggling to turn climate pledges into action

After setting up the nation’s first local green bank in 2015, Montgomery County is set to give it a major funding boost

Tim Judson, president of the Takoma Overlook homeowners association, activates an electric-vehicle charging station, one of several upgrades made at the Takoma Park, Md., property with help from the Montgomery County Green Bank. (Bill O'Leary/The Washington Post)
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Epworth United Methodist Church in Gaithersburg, Md., has long wanted to go solar.

The church’s congregants are environmentally minded and made it a point in recent years to incorporate climate change into their teachings and build gardens across the church’s five-acre plot to absorb runoff rainwater and grow edible plants. Solar panels, which could yield energy savings as the church expanded its digital services, seemed like a logical next step.

The only problem was the money.

The church would have to fork out tens of thousands of dollars upfront to buy and install solar panels on the roof of its 57-year-old sanctuary — a cost too onerous given the laundry list of other repairs and programs that needed funding. The idea stalled until the summer of 2020, when the Montgomery County Green Bank, a government-backed nonprofit entity, said it would help finance the transition to solar — at no cost to the church.

When Ken Umbarger presented the proposal to other board members, they responded with disbelief.

“It sounded too good to be true,” he said.

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In the face of rising urgency around the climate crisis, nonprofits that help private entities pay for sustainability initiatives have drawn increasing traction across the country, especially in liberal counties like Montgomery that have struggled to match ambitious vows to cut greenhouse-gas emissions with meaningful — and often expensive — infrastructure changes.

These nonprofits, or “green banks,” leverage public or philanthropic dollars to draw in private investment in projects that building owners, contractors or developers may not otherwise deem financially worthwhile. They underwrite loans, lend money directly or, as in Epworth’s case, broker power-purchasing agreements with companies that own and lease solar panels so clients pay for the energy but not for the equipment. In recent years, green banks have also increasingly started to position themselves as vehicles for bridging inequities, focusing their investments in underserved communities that have suffered the effects of climate change but have not traditionally been able to afford the technology to go green or to benefit from the cost savings of doing so.

Montgomery’s all-Democratic council in 2017 vowed to reduce greenhouse-gas emissions by 80 percent over 10 years. Despite numerous community forums and more than $400,000 spent in consulting fees, environmental advocates say results have been sluggish, hampered by disagreements among elected officials. County Executive Marc Elrich (D) said he has been pushing sweeping legislation that would legally require buildings over a certain size to improve their energy efficiency, but his administration took 14 months to send the bill to the County Council, which has been reviewing it since April.

In November, County Council members Andrew Friedson (D-District 1) and Tom Hucker (D-District 4) proposed legislation that would allocate 10 percent of the county’s energy-tax revenue — about $18 million annually — to the green bank. The initiative has managed to skirt the tensions that have dogged other climate initiatives in the county of 1 million, with eight out of nine council members signing up as co-sponsors, and environmental groups such as the Sierra Club lining up with business groups such as the county’s Chamber of Commerce and the Apartment and Office Building Association of Metropolitan Washington to express their support.

“This bill can represent the county’s most significant investment in addressing the climate emergency,” Hucker said.

State and local green banks sprouted up across the United States about a decade ago, when an effort to establish a national green bank failed in the U.S. Senate. The push for a national entity that would coordinate green financing returned this year in President Biden’s Build Back Better plan, which earmarked $20 billion for the effort. But now, as the spending plan faces potentially insurmountable opposition, advocates are turning again to what can be achieved on the local and state levels.

“One way or another, we’ve got to get this done, and local and state green banks are huge force multipliers in our efforts to tackle climate change,” said Sen. Chris Van Hollen (D-Md.). “We must intensify our efforts to deploy these important vehicles for climate action.”

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The American Green Bank Consortium has seen its membership double from 11 to 22 in the past three years. Most members are backed by state governments, which have bigger wallets to spend on seed funding.

Montgomery County was among the first local jurisdictions in the country to set up its own green bank, in 2015, and now there are similar organizations in D.C., Baltimore, Philadelphia and New Orleans. The DC Green Bank, which started signing projects in 2020, has provided nearly $1.8 million in loans for low-to-moderate-income households in Wards 4, 6 and 7 to transition to solar power and is in conversation with the city’s historically Black churches to discuss collaboration. The Climate Access Fund, based in Baltimore, works almost exclusively to bring community solar, in which multiple people share the energy produced by an off-site solar farm, to low-income households.

“Things are sort of fever pitch right now,” said Alex Kragie, director of the American Green Bank Consortium. “We’ve seen a tremendous amount of interest as policymakers realize that the climate issue is … about more than just setting targets for renewable-energy standards. It’s about providing the resources to make that happen.”

One of the Montgomery County Green Bank’s first and largest projects was at Takoma Overlook, a 232-unit condominium building in Takoma Park that had been spending 40 percent of its annual $1.9 million budget on utilities. The building’s homeowners association wanted to do a comprehensive energy retrofit and get rid of the energy-guzzling boilers in the basement, but not in a way that would require residents to pay more than what they already did in condo fees, said association president Tim Judson. The 54-year-old building, where a two-bedroom unit costs about $250,000, is among the more affordable places for people to live within the Beltway and draws a high percentage of immigrants and people of color, Judson said.

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Having an “activist lender” that provided bridge loans when construction was delayed by supply chain issues was crucial to completing the project, Judson said. The property now has new energy-efficient boilers, digital thermostats to control the heat in individual units and an electric-vehicle charger.

“These things basically run themselves,” Roy McDaniel, the building’s maintenance manager, said as he stood next to the new boilers one recent afternoon. The old boilers overheated and broke down frequently; the shiny new metal equipment that replaced them has touch-screen control pads and microturbines that used natural-gas waste to generate 25 percent of the building’s energy.

Epworth United Methodist Church is nearing the end of contract negotiations with the Montgomery County Green Bank and hopes to start installing its solar panels next year, Umbarger said. Since he started coming to the church in 1975, he has seen its energy needs grow. First, there was the heating and electricity for a new wing housing a preschool, TV screens in meeting rooms, computers for English-as-a-second-language classes — and now, amid the pandemic, projector screens in the sanctuary to stream services digitally. The shift to solar will bring cost savings, Umbarger said, but also bring the church’s operations more in line with the beliefs of its congregants.

“It’s what we try to teach as part of appreciating creation,” Umbarger said one recent morning as he munched on a persimmon grown on church grounds.

“After all,” he continued, “one of the first things God told John was to take care of the garden.”