The New York Green Bank (NYGB) is a state-sponsored specialized fund that invests in New York State’s clean energy markets. Since its launch in 2013, NYGB has committed over USD 2.5 billion to projects supporting building decarbonization, clean transportation, energy storage, solar, and other sustainable infrastructure—expected to avoid up to 48.9 million metric tons of carbon dioxide (CO₂).
The New York Green Bank is a public sector, state-backed, bank that provides finance and assistance to green energy projects in order to reduce the state’s CO₂ emissions. The NYGB complements New York State’s (NYS) portfolio of clean energy programs, contributing to the Clean Energy Fund objectives, supporting NYS’ clean energy targets, which include 70 percent renewable energy generation by 2030 and 100 percent carbon-free electricity by 2040.1
NYGB is a specialized investment fund working in collaboration with the private sector (i.e., energy service companies, developers, and equipment manufacturers) to provide financing, mobilize capital for the clean energy market, stimulate investment in renewable infrastructure, and reduce greenhouse gas emissions in the United States’ New York state.2 Unlike grants or incentives, the NYGB investments are made at market rate values on a commercially viable basis without external support to ensure long-term sustainability through risk-adjusted returns (profit measured in relation to how likely financial loss might occur), operating cost coverage, and the overall financial sustainability of the bank.3 The bank’s financing strategy is limited to projects that can generate enough revenue over time to produce value and cover costs.4
The bank’s overarching operating principles include:5
- Providing loans to wholesale capital markets or large-scale financial organizations such as municipal governments rather than individual households.
- Structuring sustainable infrastructure financial products that are scalable and replicable.
- Utilizing commercially consistent approaches to assessing creditworthiness and risk.
- Collaborating with, rather than competing against, market participants.
- Focusing on market areas that are underinvested with available limited financing.
- Recycling capital for new investments.
- 35 percent of capital that is allocated to projects benefiting underserved communities.6
At the project level, the NYGB works to expand the climate energy market by targeting three key areas that are underinvested but have strong potential to attract private capital:
- Underserved markets: Projects located in areas with few existing companies or investors.
- Low technology risk: Projects where the technology is proven and unlikely to fail, minimizing operational risks.
- High liquidity premiums: Projects that are harder to resell without a loss in value (e.g., long-term infrastructure such as solar farms), which require higher returns to attract investors—unlike assets like US Treasury bonds—which are short-term and easily tradable.
These projects must also demonstrate viable track records, proving to other lenders the capability of fulfilling financial promises.7
The NYGB’s involvement varies across projects depending on the support needed. These roles span from credit enhancements (these improve the creditworthiness of an investment making it more attractive to investors), serving as a lender, or acting as a warehouse provider that offers logistics services to other businesses.8 In addition to variable involvement levels, the NYGB’s work encompasses flexible strategies and adaptive financing products such as revolvers to fund recurrent debt, predevelopment, interconnection, and construction-to-term loans.9
Implementation
A series of climate-focused reports, plans, and panels prefaced the formation of the NYGB by establishing a political environment for climate-focused solutions within New York. In 2007 under Mayor Michael R. Bloomberg, the PlaNYC report: “Getting Sustainability Done” established an initial set of ambitious climate goals surrounding climate action within New York City.10 In 2008, a panel of 20 independent experts across science, economics, finance, urban planning were brought together to establish the New York City Panel on Climate Change (NPCC)11 to provide scientific information and climate projections that the city must attain to reach its climate goals.12 The reporting by the NPCC and other groups highlighted the existing financial barriers and additional funding needed to implement clean energy and climate solutions at an impactful scale. In December of 2013, the New York Green Bank Business Plan, an independent market survey conducted by Booz & Company, identified key challenges the clean energy market faced and that a green bank in New York would be a viable use of taxpayer funds to deploy and mobilize clean energy in the state.13
As New York’s political environment increasingly fostered climate-action-based dialogue, other US state governments joined to lead the charge to create the first green banks in the country. 2011 saw the establishment of Connecticut’s Clean Energy Finance and Investment Authority (CEFIA), the first green bank in the United States.14 CEFIA demonstrated the fundamental viability of state green banks, upon which NYGB was adapted for the New York context.15 In 2013, the Public Service Commission (PSC) approved NYSERDA’s petition to establish and fund the operations of the NYGB.16 By 2014, NYSERDA launched the NYGB.17 Since then, the NYGB runs as a fully operational state-sponsored investment fund, investing in New York State’s clean energy markets.18
Investment
A total of USD 1 billion was invested to launch the New York Green Bank.19 This included an initial USD 218.5 million from reallocated climate-related funds20—mainly from NYSERDA’s Energy Efficiency and Renewable Portfolio programs21—and USD 52.9 million raised through carbon allowance sales under the Regional Greenhouse Gas Initiative.22 Additional contributions included USD 150 million approved in 2015 and USD 782 million from a broader USD 5 billion NY Clean Energy investment in 2016.23
Assessment
NYGB is the largest green bank in the United States.24 As of March 2025, NYGB has invested over USD 2.5 billion in cumulative commitments to clean energy and sustainable infrastructure, generating USD 327 million in cumulative revenue.25 Additionally, NYGB is already committed to supporting USD 9.7 billion in future projects.26 Calculations estimate that over 48.9 million metric tons of CO₂ emissions have been avoided through NYGB’s investments.27
Research by Dunsky Energy + Climate Advisors and Evergreen Economics confirm that NYGB has played a meaningful role in growing clean energy markets.28 A key part of its success is its early leadership, helping prove that clean energy projects can work financially, especially in smaller or underserved markets. NYGB tailors its financial products to fit different types of borrowers and projects, from commercial energy upgrades to utility-scale developments and affordable housing retrofits. It also offers flexible financial deal sizes and shows a greater willingness to take on risk, helping attract private investment.29
The NYGB is one part of New York State’s broader clean energy efforts—not a single solution but part of a wider policy mix.30 While it helps connect public and private financing, it is a state-run bank that depends on government support and political backing. As a result, its success, and that of similar public banks, can depend on who is in power.
Additional Information
From 2009 to 2021, over 20 state and municipal green banks have been established in the US. The work of green banks and green energy financing culminated after decades of advocacy in the 2022 Inflation Reduction Act, which launched for the first time the Greenhouse Gas Reduction Fund (GGRF), a USD 27 billion grantmaking program designed to fund state and local green banks, community development financial institutions, and other lenders investing in green energy at a national scale.31 The GGRF was a noteworthy national-scale financing vehicle attempting to address climate justice and benefit low-income communities by improving health from climate pollution via increased clean energy.32 As of March 2025, under the current Trump Administration, disbursement of funds under the GGRF has been paused and is unavailable due to the Environmental Protection Agency blocking grantees’ ability to draw grant funds.33 This funding freeze leaves project developers and alternative green bank financing in limbo, threatening the nationwide cancellation of green energy projects.34
Two contracts highlight NYGB’s success in expanding clean energy. In one, NYGB partnered with Generate Capital to fund rooftop solar projects in New York City—leading to the largest rollout of its kind and helping the city reach its 100 megawatts onsite renewable energy goal, with major cuts to greenhouse gas emissions.35 In another, NYGB invested $104.4 million in Convergent Energy + Power to support 56.5 megawatts of distributed energy projects, bringing cheaper clean energy to New Yorkers. Both deals show how NYGB uses finance to grow clean energy markets.36
Solar farm © Getty Images/Unsplash.
References
- 1. Coalition for Green Capital, “New York Green Bank - Coalition for Green Capital,” May 30, 2024, https://coalitionforgreencapital.com/new-york-green-bank; NY Green Bank, “Metrics, Reporting & Evaluation Quarterly Report No. 43,” May 29, 2025, https://greenbank.ny.gov/-/media/Project/Greenbank/Files/NYGB_Quarterly_Report_PSC_Mar_2025_250529.pdf.
- 2. Webpage, “NY Green Bank,” NYSERDA, n.d., https://greenbank.ny.gov/; NC Clean Energy Technology Center, “NY Green Bank,” DSIRE, October 11, 2023, https://programs.dsireusa.org/system/program/detail/5539/ny-green-bank.
- 3. Webpage, “About NY Green Bank,” NYSERDA, n.d., https://greenbank.ny.gov/About/About.
- 4. "NC Clean Energy Technology Center.”
- 5. NY Green Bank, “Metrics, Reporting & Evaluation Quarterly Report No. 43;” Andrew Bloomenthal, “What Is a Revolver? Definition in Lending and How It Works,” Investopedia, November 7, 2023, https://www.investopedia.com/terms/r/revolver.asp.
- 6. Webpage, “About NY Green Bank.”
- 7. Webpage “Investment Strategy - NY Green Bank,” NYSERDA, n.d., https://greenbank.ny.gov/About/Investment-Strategy; “Track Record - (Entrepreneurship) - Vocab, Definition, Explanations | Fiveable,” Fiveable, n.d., https://library.fiveable.me/key-terms/entrepreneurship/track-record.
- 8. NC Clean Energy Technology Center, “NY Green Bank;” Jake Rheude and Jake Rheude, “How to Pick a Warehouse Provider,” Red Stag Fulfillment, July 8, 2025, https://redstagfulfillment.com/how-to-pick-warehouse-provider/.
- 9. Webpage, “NY Green Bank.”
- 10. Farzad Mousavi, Cross-Sector Collaboration: The New York Green Bank (NYGB), the New York City Panel on Climate Change (Urban Climate Change Research Network, 2023), https://core.ac.uk/download/pdf/647988607.pdf.
- 11. Ibid.
- 12. Ibid.
- 13. Whitney Angell Leonard, “Clean Is the New Green: Clean Energy Finance and Deployment Through Green Banks,” Yale Law & Policy Review 33, no. 1 (2014): 197–229, http://www.jstor.org/stable/43921537; NY Green Bank, “Metrics, Reporting & Evaluation Quarterly Report No. 43.”
- 14. Leonard, “Clean Is the New Green.”
- 15. Ibid.
- 16. NC Clean Energy Technology Center, “NY Green Bank.”
- 17. Mousavi, Cross-Sector Collaboration.
- 18. Webpage, “About NY Green Bank.”
- 19. Dunsky Energy + Climate Advisors, “Dunsky Assesses NY Green Bank’s Impact in Transforming Clean Energy Markets - Dunsky,” Dunsky, October 18, 2024, https://dunsky.com/project/dunsky-assesses-ny-green-banks-impact-in-transforming-clean-energy-markets/.
- 20. NC Clean Energy Technology Center, “NY Green Bank.”
- 21. Ibid.
- 22. Ibid.
- 23. Ibid.
- 24. Leonard, “Clean Is the New Green;” Coalition for Green Capital, “New York Green Bank - Coalition for Green Capital.”
- 25. NY Green Bank, “Metrics, Reporting & Evaluation Quarterly Report No. 43.”
- 26. Ibid.
- 27. Ibid.
- 28. Climate Policy Initiative et al., “The State of Green Banks 2025,” 2025, https://www.climatepolicyinitiative.org/wp-content/uploads/2025/04/The-State-of-Green-Banks-2025.pdf.
- 29. Ibid.
- 30. Coalition for Green Capital, “New York Green Bank - Coalition for Green Capital.”
- 31. Climate Policy Initiative et al., “The State of Green Banks 2025.”
- 32. Ibid.
- 33. Mikaela Tajo and Rachel Jacobson, “Continued Freeze of Greenhouse Gas Reduction Fund Threatens Climate Investments in Vulnerable Communities Across the Country,” Center on Budget and Policy Priorities, May 9, 2025, https://www.cbpp.org/blog/continued-freeze-of-greenhouse-gas-reduction-fund-threatens-climate-investments-in-vulnerable.
- 34. Ibid.
- 35. Mousavi, Cross-Sector Collaboration; Webpage, “Goals - a Roadmap for New York City’s Buildings,” NYC Built to Last, 2025, https://www.nyc.gov/site/builttolast/goals/goals.page.
- 36. Ibid.