Source: Mark Muro, Brookings, January 11, 2012.
However, state clean energy funds’ emphasis on a project finance model—which directly promotes clean energy project installation by providing production incentives and grants/rebates—is by itself not enough to build a statewide clean energy industry. State clean energy funds also need to pay attention to other critical aspects of building a robust clean energy industry, including cleantech innovation support through research and development funding, financial support for early-stage cleantech companies and emerging technologies, and various other industry development efforts.
As it happens, some of these state clean energy funds are already supporting a broader range of clean energy-related economic development activities within their states. As more and more states reorient their clean energy funds from a project finance-only model in order to encompass broader economic development activities, clean energy funds can collectively become an important national driver for economic growth.
To become true economic development engines in clean energy state clean energy funds should:
- Reorient a significant portion of their funding toward clean energy-related economic development
- Develop detailed state-specific clean energy market data
- Link clean energy funds with economic development entitities and other stakeholders in the emerging industry
- Collaborate with other state, regional, and federal efforts to best leverage public and private dollars and learn from each other’s experiences
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