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What you need to know to access the $14 billion from the EPA’s National Clean Investment Fund

The 'national green bank' will prioritize underinvested projects and communities to support clean energy projects. 

One of the entrances to the U.S. Environmental Protection Agency (EPA)

Image courtesy of Shutterstock/Tada Images

The National Clean Investment Fund (NCIF) — often referred to as the national green bank — has $14 billion available for clean energy projects across the country. Before local projects can access that money, the EPA will select two or three nonprofit organizations from a pool of applicants to manage the distribution of funds. Here’s what you need to know.

What is the NCIF?

The goal of the NCIF is to create national clean financing institutions that work in tandem with the private sector to stimulate the clean energy marketplace. 

A pool of nonprofit organizations — including Climate United, the Justice Climate Fund, the Coalition for Green Capital, Power Forward Communities and Ecority — submitted applications in October to manage the distribution of the $14 billion, with two or three winners expected to be announced by the EPA in March. Funding is expected to begin in July.

The ultimate goal of the NCIF is to fund technology that can be deployed in communities across the U.S. while reducing greenhouse gas emissions 50-52 percent below 2005 levels by 2030.

What forms of funding will be available?

Each nonprofit applicant had to demonstrate how they plan to mobilize private capital to stimulate additional deployment of emissions-cutting technology, a requirement of the NCIF. The applications were not available for public viewing.

"The government makes investments that can be leveraged creatively so that private capital is drawn into the market," said Daniel Bresette, president of the Environmental and Energy Study Institute.  

Funding assurances provided by a government-backed program will lower risk for private sector investors, according to Bresette, enabling that money to flow into the marketplace and setting off a domino effect.  

The government’s investment may take the form of debt, equity, hybrid (such as preferred equity) or credit enhancements. 

"Grantees may provide financial assistance to various types of counterparties," said Asher Mayerson, special adviser in the office of greenhouse gas reduction fund at EPA, during a webinar for the NCIF, "which could include, as examples, project sponsors directly, as well as community lenders and other similar institutions who could then use the capital to provide financial assistance to qualified projects." 

Who can qualify for some of the $14 billion?

For-profit businesses, units of government and community lenders are eligible, so long as they fall within one of the three priority project categories, according to the EPA

  • Distributed energy generation and storage: Includes small-scale power generation or storage technologies, with the specific requirement that the tech must support carbon pollution-free electricity. Examples include community solar and wind, fuel cells and distributed generation and storage assets that support microgrids.
  • Net-zero emissions buildings: Includes retrofitting an existing building toward net-zero emissions or constructing a net-zero building in a low-income and disadvantaged community. Examples include geothermal heating and cooling and grid-interactive appliance electrification.
  • Zero-emissions transportation: Includes the deployment of zero-emissions transportation and infrastructure. Examples include the deployment of charging infrastructure and charging and refueling depots for zero-emissions school buses.

Specifically, the EPA is prioritizing underinvested projects and communities. 

Guidance regarding the process for organizations to apply for the funding is not yet available. The application process will be shaped by the nonprofit managing the funds. 

Despite the uncertainty, "there are things that can be done now to help you develop a plan and set goals," said Bresette, "like learning about how energy is used in your buildings and researching rebates and other incentives that your utility might already offer. Chances are, your state's energy office is deeply engaged in IRA and [Bipartisan Infrastructure Law] program rollouts, which makes it a key source of really critical information and perhaps additional incentives."

Are IRA tax credits eligible for NCIF funding?

Yes.

"The EPA has not stated any programmatic restrictions related to whether individuals and organizations that receive financial assistance for projects under the National Clean Investment Fund, can also take advantage of other IRA tax credits," said Mayerson. But it's important to pay attention to any future guidance offered by the IRS, which will ultimately make that decision.

GreenBiz will monitor the process and report with updates.

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