Climate bill could create 1,000 new companies, says head of investment at Bill Gates’ Breakthrough Energy Ventures

FAN Editor

The Inflation Reduction Act passed by Congress includes a $369 billion investment in climate and energy policies, the biggest investment in U.S. history to fight climate change. From tax breaks to direct subsidies, it has big implications for businesses in clean energy, clean manufacturing and clean innovation.

Its passage will be huge for startups in the climate space as well as the big venture capital firms that back them.  

“Everybody wants to be part of this,” said Carmichael Roberts, co-leader of the investment committee at Breakthrough Energy Ventures, the climate fund founded by Bill Gates. “The calls that I’m getting now — tremendous, already, and there was already a big groundswell around climate, but this just really boosted even further.”

Roberts said the ability to manufacture in the United States, thanks to tax breaks and other incentives, is “transformative” for startups and will incite entrepreneurship. “I bet you there’s somewhere between 300 to 1,000 companies that will exist now because of this bill that would not have existed,” said Roberts.

Startups in the climate space already are applauding the passage. Here’s what the CEOs of some companies featured in CNBC’s Clean Start series have to say:

  • BlocPower, which aims to electrify every building in America, expects to see big tax breaks for both consumers and for the company itself. CEO Donnel Baird said the package “dramatically lowers the cost to building owners and homeowners of clean energy upgrades. It creates a new Green Bank to provide flexible capital to clean energy projects that Wall Street can leverage.”
  • Electric Hydrogen builds systems to produce green hydrogen power. CEO Raffi Garabedian said, “The policy rightly acknowledges hydrogen’s power to decarbonize heavy industry…and was designed to reward hydrogen producers who can minimize the carbon emissions.”
  • Epic Cleantec builds on-site water recycling systems for urban buildings. Its CEO Aaron Tartakovsy said, “We’re thrilled to see $4 billion directed to aiding the Western States currently grappling with a very difficult drought, a challenge we at Epic are actively addressing.”
  • Indigo Ag helps farmers make cash from carbon credits by implementing green farming technologies. “The proposed $20 billion commitment [in agriculture subsidies] would enable farmers to plant the seeds for a meaningful, long-term and durable climate solution,” said CEO Ron Hovespian.
  • CityZenith creates digital twins of cities and buildings, right down to their energy operations. By doing so, it helps cities and developers lower their carbon footprints before they ever start construction. “This news could impact our share price in the near future and facilitate the close of a large institutional investment round later this year or early next year,” said CEO Michael Jansen.

Perhaps the biggest impact is that government investment in climate initiatives and innovation will give private investors much more confidence in the climate space. 

 “The venture capital dollars will flow in a lot faster from areas that may not have been investing in an area, but now all of a sudden, see, wow, we’re going to have a real path to scale with the best and the brightest people, and the best companies being created. That’s what this bill overall does,” said Roberts.

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