The use of municipal bonds to finance clean energy projects is becoming more popular, leading to significant cost savings for towns and communities as they work towards their renewable energy goals. Meg Duff, reporting for Capital & Main, highlights this trend.
Historically, municipal bonds have allowed towns to buy natural gas at lower rates. Now, this practice is expanding to include renewable energy, potentially saving 10% or more on long-term contracts. The California Community Choice Financing Authority is at the forefront of this shift, having issued nearly $10 billion in renewable energy bonds since 2021.
However, not all areas are quick to embrace renewable energy. Georgia, for example, has been hesitant to adopt renewable energy prepays due to its reliance on traditional power sources.
Dennis Pidherny, a managing director at Fitch Ratings, notes the importance of flexibility in the transition to renewable energy. The future is uncertain, but adopting municipal bonds for renewable energy can lower costs and speed up the shift towards sustainable energy sources. This financial strategy may also help counter the competition from traditional power infrastructures, encouraging more widespread adoption of renewables in energy plans.