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This case study examines Michigan's clean community financing ecosystem, highlighting how a dense network of green banks, CDFIs, and state-level initiatives can be coordinated to scale clean energy investments. It identifies key institutional actors, such as Michigan Saves and the Michigan Climate Investment Hub, and discusses the necessity of segment-specific working groups and technical assistance to overcome barriers like high electricity rates and limited specialized labor.

Following a structural shift in 2025 where federal programs providing flexible capital for clean energy projects receded, RMI convened 70 practitioners to identify how to make community projects fit the "credit box" of mainstream capital. The report argues that projects often fail to secure financing due to three primary gaps: affordability (economic viability for low-income users), risk perception (investor discomfort with unfamiliar risks), and market access (assets being too small or fragmented for secondary markets). To resolve these, the report proposes four priorities for 2026: fixing the affordability gap through tools like on-bill mechanisms and interest rate buydowns; addressing risk perception via standardized credit enhancements; closing the market access gap through asset aggregation and warehousing; and resolving ecosystem capacity constraints by investing in subnational financing systems to improve coordination and capital translation.

The briefing outlines how regional financing ecosystems—comprising regional banks, community lenders, economic development organizations, and governments—can unlock capital for clean energy by structuring local projects into investable portfolios. It highlights that a one-size-fits-all approach is ineffective, citing specific high-feasibility opportunities in Minnesota (green steel and transmission) and New Orleans (green buildings and hydrogen). By coordinating diverse financial actors and using public or philanthropic funds to absorb first-loss risk, these ecosystems can address persistent barriers such as lack of predevelopment capital and underwriting friction to ensure inclusive economic benefits from the energy transition.

The policy brief outlines six priorities for U.S. states to leverage the One Big Beautiful Bill Act (OBBBA) and other federal incentives: immediate electric vehicle fleet conversion, permitting and interconnection reform, filling financial gaps via public-private partnerships and aggregate purchasing, improving energy affordability, launching home energy rebates, and attracting cleantech manufacturing. It emphasizes the urgency of acting before federal tax credits expire, specifically noting a September 30, 2025, deadline for EV credits and a July 2026 construction start deadline for certain solar and wind credits.

The industrial sector accounts for nearly a quarter of US greenhouse gas emissions in 2022, characterized by process-based and high-temperature emissions. Using an analysis of Washington state, RMI demonstrates that emissions-intensive, trade-exposed (EITE) sectors—particularly refineries, which produce 68 percent of EITE emissions—could reduce emissions by 39 percent by 2035 and 91 percent by 2050. This transition would require an additional 13,975 GWh of annual electricity by 2050 in Washington, representing a 65 percent increase in industrial demand. To enable this, states must leverage tools such as grid access, permitting reform, and financial supports like green banks to complement federal incentives.

The document outlines the RISE model, where tax-exempt organizations act as solar owners to install systems for LMI households at low or no upfront cost, utilizing the IRS 'direct pay' mechanism to claim the Clean Electricity Investment Tax Credit (ITC). It details an eight-step implementation process: determining project type and team, identifying ownership structures (such as green banks or CDFIs), planning capital stacks, selecting installers, conducting community engagement, constructing projects, claiming tax credits, and managing ongoing operations. The guide emphasizes the importance of trusted community messengers and provides strategies for adapting to potential policy changes regarding federal incentives.

The report evaluates the $27 billion Greenhouse Gas Reduction Fund (GGRF) as an economic development tool. Using the Energy Policy Simulator, Energy Innovation estimates that the fund's $24 billion in financial assistance will generate 36,000 to 41,000 annual jobs, $21.3 to $23.9 billion in wages (2025-2031), and $52 billion in consumer energy savings over 20 years. The GGRF operates through national-scale 'Green Banks' via the National Clean Investment Fund and local-level initiatives like the Solar For All and Clean Communities Investment Accelerator programs to mobilize private capital and support disadvantaged communities.

The guide evaluates four green bank models—standalone green banks, green-focused policy development banks (PDBs), green facilities within PDBs, and country platforms—based on a country's economic position, governance, and product needs. It specifically highlights that country platforms are most suitable for low-income countries (LICs) and debt-distressed nations due to international financial institution (IFI) support. Additionally, the guide proposes three international support mechanisms: a new green bank design accelerator providing technical and seed funding, the expansion of existing platforms like the FiCS Innovation Lab, and the formation of a coalition of existing initiatives for knowledge exchange.

The report examines the role of green banks in bridging the USD 7.4 trillion annual climate funding gap. It identifies four main structures: standalone de novo banks, enhanced public development banks (PDBs), green facilities within PDBs, and country platforms. While standalone banks are more common in advanced economies, EMDEs frequently utilize green facilities as transitional mechanisms. The report emphasizes that success depends on financial, environmental, and political sustainability, and proposes three international support options: a new design initiative, expanding the FiCS Innovation Lab, or forming a coalition of existing initiatives.

The document argues that tax-exempt entities—such as CDFIs, green banks, and cooperatives—can overcome financial barriers to low-income solar adoption by becoming third-party owners. This model utilizes the IRA's 'direct pay' mechanism, Greenhouse Gas Reduction Fund (GGRF) capital, and bonus tax credits to reduce costs for LMI households, who often lack the tax liability to benefit from traditional residential credits.

The Rural Energy Savings Program (RESP) provides zero-interest loans to eligible entities, such as electric cooperatives and green banks, to fund energy efficiency, renewable energy, and electrification improvements for rural households and small businesses. The program leverages Rural Utilities Service loans and allows for repayment via utility bill line-items. A proposed House version of the Farm Bill seeks to expand the program by codifying green banks as eligible borrowers, adding manufactured home replacements to eligible measures, introducing grants for technical assistance and repairs, and reauthorizing funding through 2029.

The Greenhouse Gas Reduction Fund (GGRF), established by the U.S. Inflation Reduction Act 2022, provides USD 27 billion in grants to reduce GHG emissions, specifically targeting low-income and disadvantaged communities (LIDACs). While the fund can catalyze wealth and resilience through clean energy and transport, it faces hurdles including short disbursement timeframes, varying operational capacities of community development financial institutions (CDFIs) and green banks, and limited workforce capacity. To address these, the Climate Policy Initiative (CPI) recommends catalyzing private capital, standardizing underwriting, coordinating technical assistance, aligning government efforts, and fostering a collaborative learning culture. CPI estimates that achieving net-zero GHG emissions by 2050 requires USD 9.1 trillion in priority project categories through 2035, with USD 2.8 trillion specifically needed in LIDACs.

The Greenhouse Gas Reduction Fund (GGRF), established by the 2022 Inflation Reduction Act, provides USD 27 billion in grants to mobilize financing for GHG emissions reduction in the United States, specifically targeting low-income and disadvantaged communities (LIDACs). While the fund offers a transformative opportunity to align climate mitigation with economic development and climate justice, the report identifies significant barriers, including short implementation timeframes, varying operational capacities among community development financial institutions (CDFIs), and a shortage of skilled workforce and project pipelines. To overcome these, the report recommends catalyzing private capital through secondary markets and blended finance, standardizing underwriting and financial products, implementing a hub-and-spoke technical assistance framework, aligning government efforts across all levels, and establishing a collaborative 'sandbox' culture for systemic learning.

The Great Lakes region is positioned for an industrial renaissance in clean energy, having seen over $40 billion in new investments since 2021. However, the report argues that the region faces significant constraints, including slow population growth, a migration of manufacturing to the US South, and uneven clean electricity deployment. To overcome these, RMI suggests that states prioritize industries where they have existing 'economic complexity' and related capabilities, such as EV batteries and low-carbon steel. The report highlights the importance of coordinating across state lines to share legislative best practices—such as the creation of green banks and competitiveness funds—and recommends a regional investment attraction strategy to draw foreign direct investment. It specifically praises Illinois and Minnesota as leaders in environmental justice and workforce development frameworks.

The report estimates that the U.S. requires $5.6 trillion in investment through 2035 across GGRF priority categories, with 31% needed in low-income and disadvantaged communities (LIDCs). It identifies significant gaps between current climate finance flows and these needs, citing barriers such as lack of lender capacity, low homeownership rates in minority communities, and distrust of external developers. The authors argue that the GGRF must act as a catalyst for private capital and recommend that philanthropic foundations provide early-stage technical assistance and funding for complementary services, such as home remediation, to ensure the fund's success.

The Canada Growth Fund (CGF), a $15 billion 'green bank' designed to catalyze private investment for Canada's net-zero transition, will be managed by the Public Sector Pension Investment Board (PSP Investments). The author warns that CGF's success depends on avoiding PSP's 'business as usual' focus on private returns, as CGF must prioritize social returns and accept higher risks through concessional finance. To mitigate the risk of conflating these mandates, the document recommends a transparent investment strategy co-written by policy and finance experts, a diverse decision-making committee with expertise in climate policy and low-carbon technology, and clear accountability structures that separate the Fund's policy goals from PSP's fiduciary duties to pension beneficiaries.

The Canada Growth Fund, a "green bank" designed to catalyze private investment in Canada's transition to net-zero, is managed by the federal Crown corporation PSP Investments. The author warns that the Fund's success depends on its ability to operate with a different risk tolerance and set of objectives than PSP's core pension fund management. While PSP focuses on maximizing returns for beneficiaries, the Canada Growth Fund must use concessional financing to support high-risk, innovative clean growth projects that offer broad societal benefits but may lack immediate private profitability. To mitigate the risk of the Fund's policy goals being eroded by a traditional private-return mindset, the author recommends a transparent investment strategy, a diverse range of expertise in climate policy and technology, and clear accountability mechanisms between the Fund, PSP, and the federal government.

The Clean Energy Finance Corporation (CEFC), Australia's green bank, uses an endowment-based model to provide concessional loans and equity to low-carbon projects. Since 2012, it has committed A$10.8 billion, leveraging a private-finance rate of 242 per cent and achieving over 200 megatonnes of CO2e reductions. While successful in crowding-in private investment and maintaining profitability, the CEFC faces risks of political interference via government-appointed boards and lacks specific targets for climate justice. The document suggests Canada's Canada Growth Fund and Canada Infrastructure Bank should adopt clear mission-driven mandates, target strategic institutional partners, and prioritize technical institutional knowledge.

The document examines the Clean Energy Finance Corporation (CEFC), Australia's 'green bank', which uses public capital to crowd-in private investment for low-carbon technologies. It details the CEFC's financial instruments, its success in generating a positive return on investment and significant emission reductions, and its vulnerability to political shifts. The analysis concludes with strategic recommendations for Canada's Canada Infrastructure Bank and Canada Growth Fund based on the CEFC's ten-year experience.

The report argues that while the Inflation Reduction Act (IRA) significantly advances U.S. climate goals, it is insufficient on its own to meet the 2030 NDC. Using the Energy Policy Simulator (EPS), the authors propose a comprehensive set of additional federal, state, and local policies across the electricity, industry, transportation, and building sectors. The electricity sector is identified as the primary driver for 2030 reductions due to its ability to decarbonize faster than sectors limited by slow stock turnover. Proposed measures include a nationwide 80 percent clean electricity standard, stricter tailpipe emissions standards, and the electrification of industrial and building heating. The report estimates that this combined policy pathway would create 2.7 million additional jobs, grow GDP by $700 billion, and avoid 3,900 premature deaths by 2030.