Community Event: Government Funding for Climate Tech

Check out the summary from our recent Enduring Planet and Friends Community Event on the government funding landscape for the climate ecosystem. Over the course of 90 minutes, we broke down what to expect of Federal funding given our new political reality, dove in to the State (and County/Municipal) funding that’s stepping up to fill the potential void and discussed the tactical and practical considerations of securing government funding across sources.

The next Webinar, Bankability in Climate Tech, will be on January 21st at 10AM PT. Sign up here.

Speakers: ​

• Dimitry Gershenson, Enduring Planet (Moderator)
• Julia Kumari Drapkin, ISeeChange
• Joel Armin-Hoiland, Climate Finance Solutions
• Erik Stokes, California Energy Commission
• Susan Gladwin, US Department of Energy
• Emily Morris, Emrgy

Notes (in chronological order):

• Q: Where is government funding today for Climate Tech? A: There is a ton of government funding available for climate projects at both the federal and state levels. The federal government has added $500 billion in new funding for climate projects (since 2022), and states like California, New York, Massachusetts, and Washington also have tens of billions of dollars allocated for climate initiatives. European Union funding for climate between 2020-2027 is over €600 billion, and tens of billions per year are spent on climate by multilateral and bilateral government entities working in developing countries. Funding for climate projects is coming from a wide range of entities, including the federal agencies like the Department of Defense, Department of Energy, and the US Department of Agriculture, and states like California, New York, Massachusetts, and Washington.
• Q: What are you seeing in terms of trends for Government Funding today? A: There is a trend towards larger awards for climate projects, not just at the federal level but also at the state level. Funding is also being allocated to a wider range of sectors and stages of companies and technologies than ever before.
• Q: What trends do you expect to see in State Funding, given the potential shifts at the Federal level with the new Administration? A: Funding from states like California and New York continue over the next four years. California has ambitious clean energy goals that have been consistent across different administrations, and they will continue to step up their goals and targets. The baseline funding levels are expected to remain the same, but the level of investment may depend on the budget situation in the coming years.
• Q: What are the requirements for accessing GGRF funding? A: The main requirement for accessing GGRF funding is the commercial technology requirement, which states that the technology must be in the market for five years and generating revenue before being eligible for GGRF funding. However, if a startup meets this requirement and can measure its climate impact easily, it presents a significant opportunity for funding.
• Q: Are there any differences across sources of grants from the applicant perspective? A: There are definitely differences in application, process, and structure across state, and federal grants. Depending on the source, there may be strings attached that tie to programmatic activities that may not be central to the applicant’s business, given local or agency priorities. It’s paramount to understand the different priorities and narratives for each type of funding, and apply accordingly to minimize distractions and wasted effort.
• Q: How should founders think about forming their grant strategy? A: An effective guiding principle is the 80/20 rule (i.e. that at least 80% of the grants work should align with your corporate roadmap). It’s absolutely critical to be very intentional about when to invest and when not to invest in grant opportunities. Additionally, founders should pursue grants where the company (and any associated grant consultants) think there’s a high likelihood of success given grant parameters. It’s not worth pursuing highly competitive long-shots.
• Q: How can founders align grant and dilutive capital interests? A: It’s important to find investors that understand the value of non-dilutive capital and see it as a way to extend their investment into the company. Government R&D grants have become a strong source of validation for private market investors, as they not only provide funding but also validate the technology readiness and milestones achieved by the project. This validation can be equally important as the funding itself in attracting private sector investors and partners.For example, the SBIR program can be a great carrot with angel investors to showcase the company's ability to secure non-dilutive funding alongside private capital.
• Q: What is going to help you increase your success rate in grant applications? In the end, it’s critical to determine the highest and best use of a team's time. The leadership teams or lead technical individuals at a startup generally aren’t the best positioned people to write grant applications. Founders should carefully consider the opportunity cost when deciding on the allocation of resources within a team. Instead, grant consultants like Climate Finance Solutions can take on this work and have the grant application experience to have a very high success rate.
• Q: How should founders think about selecting consultants to support their grant efforts? A: Any consultant you hire to support your grant efforts should have a high degree of technical depth and the ability to understand a company's technology without extensive explanation. Founders should carefully assess the success rates of consultants, ask for referrals, and evaluate the specific team members who would be allocated to their given project.
• Q: Where can people find grant consultants that are recommended and trusted? A: The best way to find consultants to help with your grant is to seek recommendations from other entrepreneurs who have won grants. Beyond that, founders can try databases like OpenGrants.io, although those are not vetted and folks should conduct a thorough diligence process as described above.
• Q: What adjustments should teams make in framing their projects given changes in the political landscape? A: Founders will likely need to adapt to a changing set of priorities at the Federal level. Think “energy independence” rather than “decarbonization”, or “community resilience” rather than “climate adaptation”. We don’t expect a material shift in framing at the State level. Regardless, it is essential to structure your narrative to align closely to your corporate goals and mission. While the language used can evolve, the core values and mission should remain consistent regardless of framing.
• Q: How should founders navigate cost share and match challenges? A: There are a number of ways teams can navigate cost share and match challenges. Recommendations ranged from leveraging customer revenue for match, seeking private capital (investors, foundations, etc), and even accessing state funding to meet match requirements. Complementary state grant programs can be a great option for cost match requirements by providing additional funding for specific project components or activities that benefit the state, such as field testing in a specific location. Founders should be careful to understand the requirements of different funding sources and align proposals accordingly.
• Q: What can founders do to get a leg up in the grant process? A: One non-obvious piece of advice that was shared by the panelists was the importance of reading publicly available grant applications (summaries of most winning proposals are publicly available for download). Additionally, panelists emphasized the value of reaching out to grant agencies and engaging with staff to learn more about funding opportunities and receive guidance on the application process. This proactive approach can help founders better navigate the grant landscape and increase their chances of success.