The following is an article written by Paul Schuster, CEO of The Trimountaine Group.

As the economy recovers from the COVID-19 pandemic, small businesses will be at the forefront of any economic recovery. And while the Biden administration considers ways to support small businesses in their recovery, it should consider the possibility of aligning those recovery efforts with the larger imperative to reduce the nation’s impact on climate change. With 30.7 million small businesses located in the United States, all efforts to reduce emissions will need to include this market.

The current administration has encouraged massive investment in climate change initiatives, including the relocation of the entire federal fleet of electric vehicles, accelerate research on battery technology and national production, and negotiate ambitious fuel economy standards. Leveraging this clean energy ambition to help small businesses emerge healthier from the pandemic should be a top priority.

Some efforts have already taken place. The pandemic relief bill adopted at the end of 2020 includes federal tax credits for solar and wind power. In fact, the bill went further and introduced a new production tax credit for offshore wind. These efforts will help maintain the momentum around renewables and continue to drive costs down. Small businesses able to access clean energy tariffs and power purchase agreements will find the opportunity to lower the costs of their utility bills.

Future policy, however, must go further. About a month ago, Democrats in Congress introduced the Clean Energy Acceleration and Sustainability Act which would create, among other things, a $ 100 billion financing institution to invest in clean energy and decarbonization projects. This federal institution would assume the role of Green National Bank and accelerate the country’s transition to cleaner energy.

Green investment banks have become a useful tool for leveraging private capital on behalf of environmental programs. States and other countries have harnessed the power of these organizations to overcome some of the major barriers that prevent clean energy from being distributed equitably throughout the economy. Green banks do this by offering loans, credit enhancements, or a number of other levers.

The Connecticut Green Bank, for example, supports renewable energy and energy efficiency products for low and moderate income households (LMI) by providing a credit guarantee. These LMI customers are then able to participate in clean energy projects from which they would otherwise have been excluded due to insufficient individual credit.

As the Biden administration contemplates a national green bank, it should harness lessons learned from Connecticut and others and not only support LMI households, but also include small businesses under its tenure. A federal institution would provide a necessary credit guarantee for small businesses emerging from today’s pandemic, encouraging investments in clean energy that can have a real impact on the bottom line and emissions of those businesses. Energy efficiency projects that lower operating costs or on-site solar panels that generate electricity at low cost would be immediate areas where it would pay off.

If the Administration wishes to be bold, the Green National Bank could play an even larger role in the energy transition. Today, large energy consumers have the opportunity to purchase electricity directly from giant utility-scale renewable energy projects, often at a price lower than wholesale market rates. They can do this because 1) they have prime credit and 2) they are consuming energy on a scale where the renewable energy project can significantly sell all of their electricity to a single consumer. As a result, the renewable project is often able to provide electricity at a lower price than the company is currently purchasing electricity from.

Small businesses, however, cannot access this value. Most are just too small to even enroll in a utility-scale renewable energy project, and even larger ones find the requirements for credit too onerous and costly to undertake. These are companies with good cash flow and strong finances, but the system is built against them to switch to clean energy.

As Congress and the Biden administration develop the scaffolding for a Green National Bank, this lack of access for small businesses needs to be carefully considered. A national institution providing the credit and storage capacity to support a number of renewable energy drawdown agreements would be a powerful accelerator for clean energy conservation.

The Bank would purchase electricity at a discounted price from new utility-scale renewable generators and, through a public tendering process, resell that energy to small businesses participating in its program. . Small businesses would have access to clean energy at low cost while the Green Bank facilitates the growth of new projects. For every dollar of credit enhancement provided by the government, several dollars of private capital would go towards the actual construction of these renewable energy projects.

The federal government is perhaps the only large entity capable of managing a program like this. Private institutions would otherwise seek a risk-adjusted return that would eat into any savings that small businesses could make, and few of them are of sufficient size to support and store energy in the first place. And while the Green Bank should also consider ways to leverage loans, research grants, and other securitization options, the opportunities related to warehousing and credit are immense. Finally, it would allow 30.7 million small businesses to capture the value of the energy transition, when they need it most.