As the climate tech industry continues to boom, an unprecedented amount of money is flowing into the sector. With governments around the world offering tax credits, grants, and other incentives for climate-related investments, there’s been a rush to track and take advantage of these opportunities.
For many in the climate tech community, this influx of funding is a new and welcome change. In the past, businesses saw climate initiatives as a costly burden rather than a potential source of profit. However, as highlighted by Joshua Posamentier, managing partner at Congruent, the landscape is shifting and investors are eager to tap into what he describes as “double-digit trillion-dollar markets” that are “largely decoupled from general tech investing.”
In the last five years, investment in climate tech has steadily increased, and although the sector experienced a dip like the rest of the startup world, the third quarter showed signs of a rebound.
This surge in funding can be attributed in part to the United States and European Union’s commitment to climate-forward policies. These policies, such as the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law in the US, and the Green Deal in the EU, offer nearly $1 trillion in incentives for climate and energy investments. But as impressive as this amount may seem, it could actually be a conservative estimate. Goldman Sachs predicts that the IRA alone may result in $1.2 trillion in incentives and spur $3 trillion in private investments.
While this influx of funding is certainly exciting, it also presents a unique challenge for companies and customers alike. With so many different incentives and rebates available, it can be difficult to keep track of and make sense of it all.
Recognizing this issue, several websites, apps, and startups have emerged, dedicated to compiling and organizing information on these incentives. Thomas Stephens, co-founder of Upfront, acknowledges the lack of a comprehensive database and explains that their startup is working to fill this gap. For companies, the process of gathering, understanding, and integrating these incentives into sales proposals can be a daunting and time-consuming task, according to Tom Carden, head of engineering at Rewiring America, a nonprofit advocating for the electrification of the economy.
