For years, banks have been financing large renewable power projects, from utility-scale solar farms to horizon-spanning wind farms. But smaller projects, like installing a heat pump in someone’s home or retrofitting affordable housing, often get passed over. They simply haven’t been lucrative enough.

But the demand is there, which is why advocates have been clamoring for the federal government to support a so-called green bank, which will underwrite these sorts of projects.

That green bank is now a reality. On Thursday, the EPA announced that it had awarded $20 billion in grants from the Inflation Reduction Act to eight organizations that will use the money to make loans that will help with those projects.

“It’s a chance to prove that this works and creates real benefit on the ground for people across America,” Dawn Lippert, founder and CEO of Elemental Excelerator, told TechCrunch, adding that “tribal communities, rural communities, low income and disadvantaged communities are really the focus here.”

Indeed, over $14 billion of the funding will go toward communities that fit those descriptions, the EPA said.

What’s more, since the money is to be used for loans, it can be recycled once those loans are paid off. Green bank loans have a pretty good track record, too. The Connecticut Green Bank, for example, has a delinquency rate that’s on par with other commercial lenders across both residential and commercial portfolios.

In addition to providing financing for energy upgrades, the Greenhouse Gas Reduction Fund, as it is known, is hoping to attract $7 in private capital for every dollar it disperses. In fact, that might be a conservative figure: McKinsey expects the new green bank should attract more than $12 of private investment per dollar on its balance sheet.

The U.S. is expected to need $27 trillion by 2050 to hit net zero carbon emissions, McKinsey estimates, which might make the green bank’s $20 billion seem small. But its ability to spur private investment and the fact that it’s not a one-time grant should allow it to have an impact that extends beyond its initial bottom line.

Founders and investors should see some benefit, too. Though the money is aimed mostly at consumers and small businesses, equity investments are a possibility, Lippert said. Plus, the funding should juice demand for technologies that have been proven and are ready for commercial deployment.

For those that aren’t yet, the green bank’s loans should have a cascading effect, sending a signal upstream to founders and investors that there are markets for consumer-level climate tech that works for low-income and disadvantaged communities.

“This $20 billion of funding is going to have a really significant impact on creating jobs, reducing costs for American families, creating a healthier, safer future for our children,” Lippert said.

For years, banks have been financing large renewable power projects, from utility-scale solar farms to horizon-spanning wind farms. But smaller projects, like installing a heat pump in someone’s home or retrofitting affordable housing, often get passed over. They simply haven’t been lucrative enough.

But the demand is there, which is why advocates have been clamoring for the federal government to support a so-called green bank, which will underwrite these sorts of projects.

That green bank is now a reality. On Thursday, the EPA announced that it had awarded $20 billion in grants from the Inflation Reduction Act to eight organizations that will use the money to make loans that will help with those projects.

“It’s a chance to prove that this works and creates real benefit on the ground for people across America,” Dawn Lippert, founder and CEO of Elemental Excelerator, told TechCrunch, adding that “tribal communities, rural communities, low income and disadvantaged communities are really the focus here.”

Indeed, over $14 billion of the funding will go toward communities that fit those descriptions, the EPA said.

What’s more, since the money is to be used for loans, it can be recycled once those loans are paid off. Green bank loans have a pretty good track record, too. The Connecticut Green Bank, for example, has a delinquency rate that’s on par with other commercial lenders across both residential and commercial portfolios.

In addition to providing financing for energy upgrades, the Greenhouse Gas Reduction Fund, as it is known, is hoping to attract $7 in private capital for every dollar it disperses. In fact, that might be a conservative figure: McKinsey expects the new green bank should attract more than $12 of private investment per dollar on its balance sheet.

The U.S. is expected to need $27 trillion by 2050 to hit net zero carbon emissions, McKinsey estimates, which might make the green bank’s $20 billion seem small. But its ability to spur private investment and the fact that it’s not a one-time grant should allow it to have an impact that extends beyond its initial bottom line.

Founders and investors should see some benefit, too. Though the money is aimed mostly at consumers and small businesses, equity investments are a possibility, Lippert said. Plus, the funding should juice demand for technologies that have been proven and are ready for commercial deployment.

For those that aren’t yet, the green bank’s loans should have a cascading effect, sending a signal upstream to founders and investors that there are markets for consumer-level climate tech that works for low-income and disadvantaged communities.

“This $20 billion of funding is going to have a really significant impact on creating jobs, reducing costs for American families, creating a healthier, safer future for our children,” Lippert said.