“But now we have to focus on tight discipline with private capital as our key partner,” he said. “You can’t do the higher-risk projects, so you work on what’s addressable.” The goal, he said, is to find projects that are still considered too risky or unproven for private-sector lenders, “but if you do it with green banks a few times, then private capital can take over.”
That’s in fact the founding principle of the green bank movement, he noted. The first green banks formed in Connecticut and New York state in the 2010s have become significant drivers of private-sector lending for building energy efficiency and electrification, solar for schools and municipalities, and other categories of investment important to meeting state and local climate policies.
The technologies behind the projects that green banks finance aren’t risky in and of themselves, Adler said. But the classes of customers that green banks work with — such as affordable housing providers and solar developers working in low-income communities — can be. “Whether they’ve been redlined out of the traditional capital markets, or the deals are not as big as traditional lenders are motivated to engage in, we’re taking on the credit risks and the deal structure and size risks,” he explained.
Green banks have continued to find ways to reduce those risks. One method is bundling funds from multiple lenders, which reduces an individual lender’s risk. That’s how Inclusive Prosperity Capital and its partners financed the community solar project for the Sisters of the Holy Family.
It’s also how the New York City Energy Efficiency Corp., a 16-year-old green bank, supported a 396-unit, all-electric affordable housing project in Salt Lake City. The green bank worked with Utah nonprofit SustainEnergyFinance to set up a $4.5 predevelopment loan — a form of financing that can be hard to underwrite for first-time projects — so that the project’s developer could move into the next phases of construction.
Green banks are also sharing technical resources to help each other lower financing costs, Adler said. He cited the Solar and Energy Loan Fund, a Florida-based green bank that has financed nearly $80 million in home energy-efficiency, solar, and storm-hardening projects. That organization has developed a platform, now being used by 13 other green banks and similar lenders across the country, that standardizes much of the underwriting and loan-processing expertise it’s built up over the past decade, said David Graber, the green bank’s chief of staff.
“We provide the back office and the capital. Partners bring the local trust and the projects,” Graber explained. The Solar and Energy Loan Fund estimates that each lending partner on the platform avoids hundreds of thousands of dollars a year in costs it would otherwise incur running a full lending operation on its own.
Montgomery County Green Bank in Maryland has blended financial technology support and layered financing to make home renewable-energy and energy-efficiency improvements more affordable. In March 2026, the organization launched a $4 million initiative that offers households low-interest loans for rooftop solar, heat pumps, and other projects.
Qualifying homeowners can access solar loans with a subsidized interest rate of 2.99% for the first 15 years, with a higher rate applying afterward, said Rokas Beresniovas, the green bank’s head of partnerships and business development.
As utility bills rise, mobilizing investment for these kinds of efforts is more important than ever, Adler said. But as the Green Bank 50 report highlights, many green banks operate on budgets of less than $2 million per year.
“We could do a lot more,” he said. “But we’re looking at what we’re able to finance.”