That big climate bill might actually make a difference

With the Senate passing the Inflation Reduction Act of 2022 last night, and House passage later this week all but assured, it’s likely that the U.S. will be taking significant — though not comprehensive — congressional action on climate change.

The bill is expected to trim U.S. carbon emissions to 40% below 2005 levels by the end of the decade. That’s short of President Joe Biden’s target of 50%, and not quite enough to help put the world on the preferred path of warming no more than 1.5 degrees Celsius. But it’s still a major step, one that could restore confidence in global climate agreements.

It’ll also give a big boost to climate tech, a sector that’s been red hot and seemingly immune to cooling sentiment.

The new version, which passed after negotiations with Senator Kyrsten Sinema, a Democrat from Arizona, has a few changes. The corporate minimum tax reportedly has been tweaked to be more lenient on manufacturers, and the changes to tax on carried interest are out, though it’s not clear whether investors were all that concerned with them anyway. It’s been replaced with a 1% excise tax on stock buybacks that goes into effect next year. Sinema also successfully lobbied for $4 billion for Western states to fight the megadrought they’re currently experiencing.

The rest of the massive bill, which we’ve covered in detail, remains largely the same. That means enticements to get people to buy EVs and heat pumps; carrots for companies to set up domestic supply chains for batteries, solar panels, and wind turbines; and $20 billion to help agriculture overhaul itself with an eye toward trimming emissions.

But will the bill be enough? Among realists, there’s largely agreement that the Inflation Reduction Act is better than nothing. It may not be perfect, but there’s still time to improve on it, right?

Online-only home solar seller bags $23M, pledging ‘dramatically lower prices’

Project Solar doesn’t make solar panels, nor does it employ crews to plop them on roofs, but the startup argues it can shake up the residential solar business by steering clear of sales reps and automating parts of the ordering, design and installation process.

Backed by $23 million in fresh Series A funding led by Left Lane Capital, Project Solar says it is on track to install 30 megawatts of solar this year, mostly in California and Texas, while apparently undercutting some of its competitors on price. The startup aims to top its 2022 installation figure by a factor of five in 2023.

But first, some context: Tesla bailed on door knocking ages ago, only to see its marketshare slump. Sunrun, meanwhile, has more than 100 sales jobs listed on its site and is the top residential solar brand by marketshare. So why would cutting out salespeople work for Project Solar, which is currently nowhere near as active as the industry leader?

For homeowners, the sell mostly comes down to price. The startup says it charges $2.20 per watt on average for installations, and as low as $1.63 after federal incentives. That’s about 25% cheaper than the 2021 national average of $2.94 per watt (before tax credits), according to the Solar Energy Industries Association. Whether it qualifies as “dramatically lower,” as the startup characterizes it, is more a matter of opinion. For folks who are especially handy, Project Solar also offers cheaper DIY options.

Project Solar’s revenue comes from marking up equipment prices, for which it gets volume discounts. The company says cutting out salespeople saves it as much as a buck per watt, and from there it leans on its in-house software to trim the time needed for things like system design, permitting and coordinating contractors. For each sale, “there are about 40 … hours of work involved in the back-end process (not including the physical labor of install, which usually takes a crew of 3-4 people eight hours),” CEO Trevor Hiltbrand told TechCrunch. He added that the firm’s software includes “a tool that has reduced engineering/CAD time from three hours to 30 minutes.”

Project Solar plans to use the Series A to expand in the Midwest and South, and to continue working on its software. Beyond Left Lane Capital, Project Solar declined to share who chipped in on the funding round, calling them “strategics within the industry.”

The road map for building the Uber of climate tech

The world needs a company willing to force governments to take action on climate change.

So far, climate tech has been the polite corner of the startup world. All pleases and thank yous, triple bottom lines and shared upsides, plenty of virtue and virtue signaling.

That’s great and all. Saving the world from probable calamity is an honorable mission statement, one that probably bleeds over into the way companies do business. And certainly the world could use more kindness, not less.

But here’s the thing: Right now, the world is moving too slowly, on track for 2.7 C of warming by 2100, far short of the 1.5 C goal that’s in the Paris Agreement. There’s no longer time for niceties. We need a climate tech startup that’s going to throw its weight around and force evolution on sclerotic governments and companies.

In short, the world needs a climate tech startup that’s like an early-days Uber, a company that won’t take no for an answer, one that tackles an entrenched, slow-moving industry bound by regulation, one with deep pockets and an eye toward the long game. Should it succeed, everyone would want to sign up as a customer. The rewards for the startup and its investors could be handsome.

Bill Gates’ Breakthrough Energy backs Terabase’s robot-built solar farms

Breakthrough Energy Ventures, a climate-focused VC firm linked to some of Earth’s wealthiest individuals, has joined a $44 million bet on solar startup Terabase Energy.

Terabase aims to rapidly build new solar farms “at the terawatt scale,” CEO Matt Campbell said in a statement. The startup claims its automated, on-site factory can already speed up plant construction and cut costs by employing robotic arms that lift and connect heavy solar panels to sun trackers. When asked for photos of the insides of its factory, Campbell pointed TechCrunch to previously published aerial pics and declined to share more, “for competitive reasons.”

Terabase also makes software tools to manage the design and construction of solar farms. The startup recently wrapped its first commercial project, where its robots reportedly installed 10 megawatts worth of panels. There are one million megawatts in a terawatt, so the startup still has a long way to go to reach its aspirations.

Breakthrough Energy Ventures was founded by Bill Gates, and its board members include Jeff Bezos and Masayoshi Son. The VC firm co-led the Terabase deal alongside Lime and Amp Robotics investor Prelude Ventures.

Their investment comes as rich folks face scrutiny for their outsized climate pollution. Gates’ private jet might not be as active as Taylor Swift’s, yet the Microsoft co-founder reportedly owns several and has called private flying his “guilty pleasure.”

Other recent deals for solar energy startups include panel installer Zolar ($105 million) and solar network developer Okra ($2.1 million).

3 steps tech companies can take to avoid ‘greenwashing’ accusations

Tech companies have historically been viewed more positively than other sectors when it comes to ESG issues, but over the past 24 months, impending climate-related regulations, and the rapid move toward greater accountability has meant that many tech companies are left exposed.

Issues such as energy consumption, workforce diversity, human capital, security, data privacy and political misuse of platforms are just some of the growing ESG challenges tech companies are facing.

In addition to preparing for regulations from the SEC and the EU’s Corporate Sustainability Reporting Directive (CSRD), tech companies also face risk of reputational damage from the latest crackdown on greenwashing.

Tech companies stand to put themselves at risk if they continue to demonstrate disconnected ESG and business strategies.

How big is the problem?

The most common topics referenced by U.S. tech companies in their financial reports include public health (ranking No. 1, a hangover from COVID-19), security (coming in second) and privacy (third). Climate change and risk management (33), GHG emissions (43), human rights (53) and biodiversity (81) have a lower priority and appear further down the list.

US Tech Companies: Topics Emphasized Most in Financial Reports and 10K filings

U.S. tech companies: Topics emphasized most in financial reports and 10K filings. Image Credits: Datamaran

For European companies, GHG emissions is in the top 20 most emphasized ESG topics, ranking 12th in order of priority. But, as this is the most regulated environmental theme, it does not signify a strategic approach to ESG. Climate change and risk management (22), and human rights (23), are comparatively high priorities, while compliance management (35) and biodiversity (72) are further down the table.