Leveraging State Clean Water Revolving Funds to Expand Clean Energy Financing

Publication Type

Policy Brief

Date Published




To meet clean energy goals, states will need significant capital. Federal funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act will help, including by capitalizing clean energy state revolving loan funds (RLFs). States can leverage state clean water revolving funds to finance even more clean energy improvements. New York and Pennsylvania have used this innovative mechanism to extend the impact of their clean energy loan programs. 

For states looking to extend the reach of their clean energy financing programs, the brief:

  • Explains how each state leveraged their state revolving funds,
  • Identifies critical success factors for doing so, and
  • Offers key elements for replicating this model

In New York, New York State Energy Research and Development Authority structured a sale of bonds secured by the repayments from a portfolio of residential energy efficiency loans from its Green Jobs – Green New York Program, with the additional support of a guarantee from the state’s clean water revolving fund. The Pennsylvania Treasury Department received a direct investment of funds from Pennsylvania’s clean water revolving fund to support the relaunch of the Keystone Home Energy Loan Program (HELP), which had previously been shuttered due to lack of support funding.

From our review of these two case studies, when facilitating state clean water revolving fund transactions to support clean energy lending, the following critical success factors emerged:

  • Reference to preventing atmospheric deposition resulting from the combustion of fossil fuels in the state’s Clean Water Act Section 319 Nonpoint Source Pollution Management Plan, which sets out that state’s strategy for reducing pollution into state waterways.
  • Strong relationships and trust between the clean water revolving fund administrator and the state agency administering the clean energy loan program.
  • Limited funding exposure for the clean water revolving funds—which are generally large and well capitalized—to ensure that any losses experienced by clean water revolving funds would have a negligible impact on the fund’s ability to support core water and wastewater projects.
  • Willingness, on the part of the clean water revolving fund administrator, to innovate and engage in careful analysis to support transaction structuring, and support from state energy partner organizations.

The brief provides case studies of these states’ experiences, critical success factors, and key elements for replicating the model.

Year of Publication



Research Areas

Related Files