Episode 12 Chris Creed, Chief Investment Officer, US Dept. of Energy’s LPO

Banking on Innovation

This episode of the Banking on Innovation podcast features Chris Creed, the Chief Investment Officer of the Department of Energy's Loan Program Office (LPO). The LPO, which was established in 2005, plays a crucial role in accelerating emerging climate sustainability technologies that are likely to be important for the country's future.

Chris explained that the little-known LPO offers senior debt to address financing challenges of sustainable energy projects through several loan programs. It aims to enable and accelerate commercialization of energy technologies and projects that are still too risky to qualify for commercial loans but once successful, are likely to measurably contribute to climate sustainability.

Chris discussed the program's early successes, citing a default rate for initial investments that was less than half of what they projected. Early LPO investments included financing for Tesla and utility-scale solar, which has now matured to being what he describes as a “bankable product.” He then highlighted some technologies that LPO is currently focusing on “bridging to bankability”, including offshore wind power, onshoring battery technology and supply chains for electric vehicles, and power grid connectivity for homes and buildings.

The discussion touched on recent changes in credit spreads, which have made LPO programs more attractive – and necessary. Regarding actions that banks can take immediately and in the coming years to promote climate sustainability, Chris recommended continued investment in viable clean energy asset classes like utility-scale solar. He also suggested collaboration with LPO to de-risk projects through partnerships and co-investment opportunities that can catalyze deployment in emerging industries.

In the final segment, the conversation shifted to the role banks, together with LPO, can play in creating win-win situations for consumers, sustainability technology businesses, and the banks themselves. Chris talked about helping change consumer and small businesses' behaviors to align with their own principles and environmental imperatives. For instance, banks can offer customers insights into energy spend and information about alternatives that would be less costly and more sustainable. With LPO support, banks, could also offer preferential loans for heat pumps versus HVAC systems or even integrate lower long-term energy spend due to sustainable CAPEX investment into residential mortgage calculations.

Beyond the episode:

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