There is a Green Tidal Wave of money coming for clean tech innovators, but the question is how to get it. One has to read over 1000 pages of “summary guidance” to figure this out. It takes a lot of work, but at our MeetUp on the evening of January 26th, we presented what we had found in our own review of all the paperwork. We focused on what the opportunities are for innovators to tap the Inflation Reduction Act and the Infrastructure Act for contract and grant money. Over $250 billion is earmarked to fund more than 100 line items in each of the federal laws. In addition, $50-100 billion is available from the state, through a dozen agencies, with the CEC and CARB being the most relevant. (See in particular our recent blog on the CARB Scoping Plan.) And many tax incentives have been created in addition that add to the total amount innovators could tap, and add hundreds of billions of dollars of subsidies to projects.
The biggest take-away is that the details of how to apply for the money are very sparse right now. That means the best thing to do is to begin to get on mail lists for future funding opportunity notices and to develop relationships with the state and local agencies most likely to be the ones that will administer the money. Networking can be very effective to get you a better place in line when the money begins to flow.
One of the newest innovations in these laws is the idea of the “Direct Pay” of tax incentives to project developers, even if they have no current tax liability. This is a huge change from trying to sell tax incentives to an organization with huge tax liabilities, for 60 cents on the dollar. The impact would be 100 cents on the dollar and paid up-front. It is like a zero-interest loan. But like with everything else the details are absent. How is the up-front payment to be reconciled with actual outcomes? From whom will the direct payments come?
A venture investor in the audience agreed that small startups should go after this kind of funding, since it is not a sale of shares and therefore, is non-dilutive. Moreover, this funding can provide the means to demonstrate and develop a technology that would never be paid for by investors at an early stage.
We also had a discussion as to what the process for actually doling out the dollars would be and whether the politics of the current Congress will get in the way.
To learn more, watch the video below. It contains live links to several other source documents to aid your exploration of how this funding may help you. We undoubtedly will be returning to this topic as more information is revealed.