The IRA Boosts Climate Tech Startups

Fifth Wall Newsletter: https://mailchi.mp/fifthwall/ira-climate-tech-boom 

How’s it going: It’s been one year since the Inflation Reduction Act was passed—the largest piece of climate legislation in the U.S. ever.

• To recap: The IRA allocated around $400 billion in federal dollars for clean energy projects. 
• It’s estimated that the IRA will lead to greenhouse gas emissions reductions of 1 billion tons in 2030, according to the DOE. 
• There’s a battery boom across the country—the IRA tax credits available are projected to cut the total cost of U.S.-manufactured battery cells and packs by one-third. And 91 companies have announced new battery projects totaling $77.7 billion in investments.
• Eight of 25 new projects in clean tech are in semiconductor manufacturing. The others range from sustainable aviation fuel to manufacturing tools for home energy efficiency. All together totaling in 133.38 billion invested.
• Domestic EV production is another top investment. Since the passage of the IRA about 65 new electric vehicle projects totaling 44.1 billion in investments were announced.

What’s more: Private investment into climate tech startups is likely to surpass the government’s funding, according to TechCrunch. 

• In the past year more than 270 new clean energy projects were announced with private investment totaling $132 billion. More than half of those funds went to EVs and batteries.
• What startup sectors have seen the biggest impact? Solar, stationary and long duration energy storage, energy transmission, hydrogen energy, carbon capture and sequestration, domestic EV manufacturing, and EV charging.

But we need trillions, not billions. Here’s the big picture: “We need trillions of dollars invested annually in clean energy and climate technologies, and we need that to happen now. And every year going forward,” Fifth Wall co-founder and managing partner Brendan Wallace writes. “We need to deploy all existing solutions, while investing heavily in the rest to bring them down the cost curve.”

For more: The trillions of dollars forgotten when fracking the energy transition