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Green Energy Bonds:

Building Publicly-Owned Clean Energy, Good Green Jobs, and Thriving Communities

Updated October 29, 2025

Authors: Jessica Juarez Scruggs, Organizing and Capacity-Building Director;
Katie Thomas Carol, Livable Futures Director; and Heejin Hahn, Program Specialist

INTRODUCTION

There's an urgent need for clean, publicly-owned, and resilient energy infrastructure at the state and local level. Fossil fuel pollution is linked to approximately 171,000 premature deaths in the United States each year. Climate-related disasters already cost the U.S. trillions of dollars and continue to devastate communities across the country. The climate crisis is driving up demand during heat waves and winter storms, raising the cost of basics like housing and groceries, and disrupting our economy. At the same time, the rapid expansion of AI data centers is causing demand for electricity to skyrocket. Unfortunately, the Republican reconciliation budget law gutted the Inflation Reduction Act and its historic investments in clean energy infrastructure. The consequences are stark: experts estimate that the bill will cost us roughly 900,000 jobs, increase the average American’s electricity bills by $110-$400, reduce new energy capacity by at least 50 percent, and leave the United States behind in the global clean energy transition. 

Local governments are resource-starved and face increased costs from other federal cuts, including to Medicaid, food assistance programs, transportation, and grants like the Solar for All program. These local governments can’t rely on regressive solutions like raising property taxes, which would further burden constituents already facing higher utility and healthcare bills. Green revenue bonds offer a viable, community-centered alternative when community priorities and worker protections are built in. 

Green revenue bonds can fund publicly-owned projects and may eventually be able to kick-start revolving loan funds that provide seed capital for community-owned clean energy projects. After the bond has been repaid, future revenue supports maintenance, upgrades, and even the seed money for new loans – multiplying the benefits over time.

A Gold-Standard Green Revenue Bond Model

A revenue bond is a financial instrument that raises funds for the construction of a revenue-generating asset. That revenue in excess of operating expenditures directly repays bond investors. Unlike an unlimited general obligation bond funded by the full faith and taxing power of a municipal entity, revenue bonds do not typically require a public vote and can be issued directly by a county, city, or school district. 

Revenue bonds are sold to municipal investors, who are repaid (with interest) from the completed project’s revenue. That is backed by the full faith and credit of the municipal government entity. This does restrict the number of projects to those that provide sufficient cost savings or revenue generation to pay back investors, but many clean energy projects at the local level could meet this criterion. 

Local governments already use revenue bonds to pay for projects from toll roads to new airports to water systems. With the right design, green revenue bonds can fund public clean energy while creating good jobs and providing community benefits – rather than enriching corporations. The World Economic Forum tracked more than 24 green bonds worldwide before 2023 that governments used to finance a wide variety of clean energy, energy efficiency, and transportation projects. The Climate Bonds Initiative provides a searchable database of climate bonds, including 135 bonds issued in the U.S. alone between 2016 and 2025. While each community's needs and energy potential will be unique, there is a clear opportunity to establish a replicable gold-standard green revenue bond model in the U.S. that steps into the federal funding vacuum to include worker protections, equitable community benefits, and positive environmental outcomes.

The Benefits of a Green Public Developer

Green revenue bonds can leverage other state and local resources to expand their impact. For example, Public Renewables Project, The Climate Reality Project, and Generation180 profiled the Connecticut Green Bank’s public developer model in their report, Public Option Solar for K-12 Schools: A Case Study of the Connecticut Green Bank’s Solar Marketplace Assistance Program. The Connecticut Green Bank created a sustainable public developer model to finance and develop K-12 solar projects with no upfront costs to schools, delivering immediate savings. Bonds were one source of financing in this model, which could be replicated in states with green banks, public Community Development Financial Institutions (CDFI), or supportive governments to create a sustainable pipeline of clean energy projects. Efforts to build a public developer can work hand-in-hand with revenue bonds to fuel clean energy projects that serve the public interest.

Investing in Truly Clean and Renewable Energy

A gold-standard bond should only fund clean energy projects that meet high standards. Standards for qualifying projects should be clearly and specifically defined and should INCLUDE solar (including small-, commercial-, and community-scale solar), wind, geothermal, battery storage, electric vehicles and chargers, heat pumps, weatherization, and building envelope upgrades. Definitions should EXCLUDE coal, oil, natural gas, liquefied natural gas, petroleum, kerosene, carbon capture, carbon capture and use, enhanced oil recovery, direct air capture, incinerators, biomass, biochar, waste methane incineration, blue natural gas, blue hydrogen, renewable hydrogen, hydrogen fuel cells, renewable natural gas, geoengineering, and other green-washed harmful technologies.

Creating Good, Green, Union Jobs

While the clean energy transition creates jobs, too many clean energy jobs pay less than conventional fossil fuel jobs. This job-quality gap is largely attributable to the lack of unions in some parts of the clean energy sector. By bundling projects and using government procurement processes, green revenue bonds can help ensure that new energy jobs are local, safe, high-wage, and union jobs. 

Bond issuers should require strong labor standards, prioritize union contracts, and use Project Labor Agreements (PLAs). Worker protection requirements can include Prevailing Wage and Apprenticeship (PWA) standards, which mandate competitive compensation and support workforce training programs. A gold-standard green bond must also include robust reporting requirements to ensure these labor standards are met and enforced, detailing specific penalties and/ or remedies if any standards are not met. 

In addition to benefiting clean-energy workers, green revenue bonds can benefit public-sector workers too by creating new revenue and reducing strain on local and state budgets. Savings and new revenue from bond-funded clean energy projects can be used to raise teacher pay, hire new public sector workers who can provide services that give back to their communities, and create apprentice initiatives for the next generation of employees, drawing from the local community.

Building in Equity and Justice

Communities that have experienced the greatest burdens from environmental racism, redlining, settler-colonialism, deindustrialization, and systemic disinvestment must be centered in the planning process and equitably share in the benefits of publicly-owned clean energy. 

Black, Indigenous, and other frontline communities of color are more likely to be exposed to high levels of deadly pollution and more likely to live near dirty power plants. For example, a 2021 study from the Environmental Protection Agency found that people of color breathe more fine particulate matter on average than white people, regardless of region or income level. These same communities are disproportionately likely to live in areas already experiencing the impact of the climate crisis, such as increased flooding, forest fires, and storms. 

Historic unequal exposure to pollution is compounded by decades of disinvestment and racist policies like redlining and bluelining, or the practice of increasing prices or withdrawing services in communities perceived to be at high risk from climate change impacts. This financial discrimination often undermines economic prosperity in communities of color and low-income communities, making it far more expensive to secure private capital to finance clean energy projects. 

Without deliberate measures to counteract this systemic discrimination, the emerging clean energy economy will perpetuate the harms of our current, extractive fossil fuel economy. Bond issuers can build equity into their projects by requiring that a certain percentage of projects be located in areas burdened by high pollution, ensuring that revenues from these projects are earmarked for investments in the hardest-hit communities, and applying the principles of Free, Prior, and Informed Consent for any project on Tribal land. Direct community control of and participation in developing green energy projects will help ensure that the benefits of the projects are fairly distributed. 

Prioritizing Community Involvement and Benefits

Publicly-owned clean energy benefits communities by moving energy infrastructure into public control and giving communities a voice in its administration through their elected leaders. True gold-standard projects will go further by centering community involvement and ensuring enforceable community benefits. 

Local governments must involve local communities in designing projects, prioritizing investments, and distributing the resources generated. This includes conducting public listening sessions to get community input on the projects funded by a green revenue bond, creating Community Advisory Boards with the power to oversee project selection, and entering into Community Benefits Agreements. These mechanisms ensure that community demands are enforceable and can continue to shape projects even after the initial construction is complete and in perpetuity. 


In conclusion, one of the core problems in renewable energy finance is the failure of the federal government to maintain accessible capital. Green energy municipal bonds can fill the gap. By implementing these bonds, municipalities can accelerate publicly- and community-owned renewable energy.

Resources

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