Winning grants from the California Energy Commission

There’s a whole world of grants out there for climate startups. Along with the cash, these awards will help you forge partnerships, scale your impact, and boost your credibility – but navigating the application process can be overwhelming. In our ongoing series, in partnership with Climate Finance Solutions, we’re doing a deep dive into the State and Federal Agencies that offer these transformative grants. Here, we’ll outline how to find, apply, and win funding from the California Energy Commission (CEC).

What is the California Energy Commission?

CEC’s mission is to facilitate the state’s transition to 100% clean energy. Its responsibilities include decarbonizing transportation, improving energy efficiency, boosting the growth of renewable energy, and developing energy policy.

The CEC employs multiple funding mechanisms – but primarily grants – to support a wide range of climate tech initiatives.

Who’s eligible for California Energy Commission grants? 

Eligibility varies widely depending on the specific grant, and can include private sector companies (including small businesses), tribes, Institutions of Higher Education (IHEs), non-profits, local governments, and quasi-government agencies. Fortunately for climate startups, most CEC opportunities are open to private sector companies, which are among the most common award recipients, along with tribes and IHEs.

How to find current opportunities

Grant solicitations are posted on the solicitations page of the CEC website. To hear about new opportunities as soon as they’re announced, you can sign up to the agency’s newsletter. 

Applying for CEC grants

Most CEC funding opportunities involve a single application stage, though some include a pre-application stage, and this dual-stage approach is starting to become more common.

The most important feature of the CEC application process is the agency’s transparent points-based scoring system. Each solicitation outlines a distinct set of criteria – such as technical merit, team qualifications, project benefits, and cost effectiveness – with each worth a certain amount of points. In writing your application, you’ll need to tick all the boxes, and go into a sufficient level of depth about how your project meets each criteria, in order to maximize your points. Most agencies have a similar points system, but do not publish the exact point values in the solicitation. This makes it easier for those who understand the points system well and focus on point maximization to significantly increase their competitiveness and chances of securing CEC funding.

Most CEC grants require projects to advance environmental justice and benefit low-income and disadvantaged communities. You’ll need to demonstrate your potential to do so, using CalEnviroScreen, CalEPA, and other state databases to back up your claims.You’ll also need to explain how your project aligns with California’s clean energy transition plan, for instance by referencing the 2019 California Energy Efficiency Action Plan or the Clean Energy, Jobs, and Affordability Act of 2022. Many CEC grants require project sites to be located in disadvantaged communities, or at least provide extra points for it, so selecting the right site is particularly important.

Finally, you’ll need to have strong existing partnerships in California; show that your funds will be spent in the state; and demonstrate a legitimate, convincing plan to scale within the state.

Common mistakes to watch out for 

Since the CEC judges applications based on a transparent, points-based system, the path to being awarded couldn’t be clearer – so don’t leave any points on the table. For example, if there are extra points for the proportion of cash match, match over the required amount, or location in a disadvantaged community, you must take advantage of them and try to secure 4 or 5 (out of 5) extra points in each category to remain competitive – you can be sure that other applicants are doing this too, and at times the difference between winning and losing a CEC grant has come down to hundredths of a point!

As part of your application, you’ll need to submit a document detailing your plans for complying with the California Environmental Quality Act (CEQA), which enables the state to determine the potential environmental impacts of your proposed project and, if necessary, how you plan to mitigate them. You’ll need to complete this document to the fullest extent possible. This will involve reaching out to the lead CEQA agency (often the local planning or building department) in order to get an initial determination (ideally a categorical exemption) that your project’s environmental impacts are not significant enough to require further review.

Another potential mistake is spending CEC funds outside of California, as part of the agency’s mandate is to spend tax dollars in a way that benefits the state’s economy. The percentage of funds spent in California is typically a scoring criterion with points allocated to it; but even if it isn’t, you should act like it is. Some of your equipment and materials may be unique and only available outside of California, but there are various workarounds to ensure they’re still counted as in-state spending or to exclude them from being subjected to this rule. These are the kinds of important nuances that a consultant like Climate Finance Solutions can help you with.

Typical timelines for a California Energy Commission grant

On average, you can expect to wait six months between the application deadline and being notified of the outcome. However, a few recent programs have moved much faster than this – as quickly as 2-3 months – but that should generally not be your expectation.

Projects the California Energy Commission has funded in the past

CEC funding spans the full range of climate technologies: transportation decarbonization (particularly zero-emissions vehicle manufacturing and charging/fueling infrastructure, alongside other tech), energy storage, industrial decarbonization, direct air capture, carbon dioxide removal, microgrids, bioenergy, virtual power plants, building decarbonization, wind energy, port improvements, grid technologies, geothermal energy, various aspects of agricultural decarbonization, hydrogen (although some of its hydrogen programs are currently delayed/frozen), and more.

Keeping compliant with agency requirements 

Follow the terms and conditions of your CEC grant agreement to the letter, and report as scheduled on your performance and financial metrics. To avoid any missteps, consider working with an expert consulting firm like Climate Finance Solutions.

Review process

Unlike most federal grants, proposal review and evaluation are typically conducted by CEC staff. This typically makes it easier to write proposals, since you are generating content for a uniform audience that understands and applies the scoring criteria consistently, rather than a review panel with varying ranges of experience and familiarity with the review process. On occasion, CEC will contact external experts to provide technical review, but it is not the typical process.

Other benefits of receiving a California Energy Commission grant

In the process of getting your project off the ground, you’ll develop critical relationships with key partners in the state, which you can continue to leverage as you grow your business. Winning CEC funding also creates a ‘halo effect’ that will validate your technology in the eyes of investors, customers, and partners. It can also act as a stepping stone towards federal awards, which can provide significantly larger sums of cash. 

Looking to the future of California Energy Commission grant programs

While federal funding is on the chopping block, the CEC’s outlook is much more positive. The agency has billions of dollars in its budget for climate tech projects, and the Governor has stated his intention to ramp up climate spending to fill the gaps left by federal shortfalls.

What to do if your grant application is unsuccessful

If you don’t get the outcome you hoped for, reach out to the CEC for a debrief. Unlike some federal grant programs, resubmissions are not an option with this agency, and many (although not all) of their solicitations are non-recurring. Nevertheless, the agency’s feedback will serve you well for future grant applications, and strengthening your connections with agency staffers will also be valuable in the long run.