As you know, I have deeply explored the Energy, Mobility, and Electrification government-related programs in the past weeks. I cover the details—subtle and apparent.
U.S. Government Energy Incentives—Funding and Tax Rebates Unwrapped
By Don Southerton May 4, 2023
In the past weeks, I have done a deep dive into Energy related incentive programs. Many are funded by the Inflation Reduction Act and channeled into government loans, grants, incentives, and tax rebates. Most of the programs seek to drive innovation, assist in funding innovative startups, and support the energy industry to invest in new technologies, for example, implementing carbon reduction platforms. All while at the same time creating jobs and sourcing domestically raw materials and manufacturing in the U.S
American-Made Program
Funded by the U.S. Department of Energy, NREL’s American Made program incentivizes innovation through prizes, training, teaming, and mentoring, connecting the nation's entrepreneurs and innovators to America's national labs and the private sector.
It is the DoE’s program to fast-track renewable energy ideas into reality.
Once a program has been announced, first-round funding for those selected can occur as soon as 60 days.
New programs are constantly being announced. Last week at the American-Made Earth Day event at NREL HQ in Golden, Colorado, several new and upcoming programs were announced.
Takeaway
As a lithium battery manufacturer, we saw no programs announced yet for 2023, we anticipate programs forthcoming for battery storage systems, like the 2022 Energy Storage Innovations Prize.
The event did, however, share firsthand funding for past and new winning teams—and their insights and hints. This was worth the investment in time, as when they announce a new program, they can be fast-tracked.
Recap of the April Earth Day Presentation
ABA Spring Hybrid Business Law
Last week the American Bar Association held the Spring Hybrid Business Law event. Two of the events I attended were Energy topics. The first was the Energy Business and Development sectional meeting. I, as a contributor, participated.
And Second, on the IRA. The Inflation Reduction Act (IRA) provides billions of dollars for clean energy and driving project investment. Combined with other federal programs such as the Department of Energy’s Loan Office, renewable energy project finance has never been stronger.
The ABA session on the IRA looked at its impact on renewable energy, including solar, wind, storage, carbon capture, hydrogen, and other technologies. Panelists also discussed the impact on the Department of Energy and the Department of Commerce, Department of Agriculture, and Environmental Protection Agency programs.
Takeaway
One takeaway was that many of the incentives are in Tax-rebates. And, they would benefit companies that make capital investments in projects. Two, all of the programs require considerable paperwork, which requires expertise. The lawyers on the panel shared their fees to ensure compliance costing from $30,000.00 to considerably more.
Some of the nuances for these tax rebates are these investments made in “energy communities.” These communities are most vulnerable in the transition to clean energy. The IRA offers clean-energy projects up to 10 percent additional financial incentives if the projects are located in Brownfields (typically small parcels of pollution-contaminated land) and sites tied to the coal industry in an effort to transition them to clean energy.
NREL Industry Growth Forum
Finally, on May 1-3, NREL held its 2023 Innovation event. Differing from the American-Made and ABA sessions, the focus was to bring targeted and vetted startups and investors together. Over 700 investors and entrepreneurs attended the 3-day event focused on Green energy, renewables, sustainability, and resilience. This year's theme was Faster, Smarter. More Connected.
Takeaway
As an attendee for the 1st time, what stood out was the strong interest by the investor community in Green. Investors, a more reserved fiscal group, have hesitated to invest in Green technology startups in the past. Now, investors are considerably less hesitant, something I witnessed first-hand.
Another takeaway was that investors are interested in assisting in connecting entrepreneurs with other potential partners—the investors support and facilitate connections.
Overall Analysis
There is little doubt that the role of government funding and incentives has kickstarted the move to electrification and Green solutions. Their motives are job creation, especially in areas of the county that need to transition from coal and oil, as well as those communities that have benefited less economically from incentives in the past. Layer on securing a domestic supply channel for raw materials and components for semiconductors, batteries, related technologies, and manufacturing.
Sourcing? Outside the sourcing restriction on Clear Vehicle Tax Credits and with few EVs qualifying, more challenging may be the DOE’s inquiring about a grant recipient-- not only sourcing from China but with potential ties to China. This is something investors, manufacturers and those in the supply chain need to review. A case in point is lithium-ion battery maker Microvast Holdings Inc. and amid criticism about the company’s ties to China , which has spurred greater scrutiny by the DOE of past grants.
I would expect more due diligence to be forthcoming—something I would recommend for all end users.
Overall Conclusion
Noted in my opening, I have done a deep dive into the Energy related programs. Many are funded by the Inflation Reduction Act and channeled into government loans, grants, incentives, and tax rebates. Most of the programs seek to drive innovation, assist in funding innovative startups, and support the energy industry to invest in new technologies, for example, implementing carbon reduction platforms. All while at the same time creating jobs, and sourcing domestically of raw materials and manufacturing in the U.S.
It is vital for those seeking funding and support first to recognize the drivers—subtle and apparent, and then tailor programs to these parameters.
I am open to discussing the best models and approaches.
Questions? Comments? Have a project in mind or need support?
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All other Dsoutherton@bridgingculture.com
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