6 ways to get federal funding for your sustainable businesses

Opinions expressed by entrepreneur Contributors are their own.

There has never been a better time to get into the climate space.

Whether you’re looking to build a sustainable business or go green to attract new customers, three key pieces of legislation can help you take the plunge.

First, the Infrastructure Investment and Jobs Act (IIJA), passed in November 2021, will increase infrastructure spending by about $550 billion over the next decade. IIJA targets roads, ports, internet, public transportation, passenger rail, electric vehicles, energy infrastructure, resilient infrastructure and environmental rehabilitation.

Second, the Inflation Reduction Act (IRA), passed in September 2022, earmarks $369 billion over the next decade for energy security and climate change.

Finally, the CHIPS and Science Act strengthens American manufacturing, supply chains, and national security through investments in research and development.

How are you using these new guidelines?

See also: How to Get Green Startup Funding and Grants

1. Switch to low-cost solar energy at a discounted rate

Small businesses are eligible for a tax credit to cover 30% of the cost of switching to low-cost solar energy. As fossil fuel prices become increasingly unpredictable, investing in solar energy ensures your business has a consistent supply of energy at a more predictable price. Not only does your spending become more predictable, solar power can cost you less in the long run.

2. Electrify your commercial vehicles with a tax credit

When you invest in solar, you can also invest in your vehicles. Commercial trucks and vans are also eligible for a tax credit to cover 30% of the cost. With increasing investment in electric vehicle (EV) infrastructure and domestic EV manufacturing, EVs are becoming more accessible and reliable. For example, the new Class 8 tractor units claim between 186 miles and 500 miles. Electric vans now travel between 100 and 400 miles.

As with solar energy, investing in electric vehicles can save money in the long run because electricity prices are lower and more stable than any other fuel. To further increase efficiency, you can invest in managed charging, where power consumption is time-limited to avoid energy consumption during peak periods – i.e. the most expensive hours – or in vehicle-grid integration, which means that Your vehicle drawing power from the grid can feed power back into the grid, possibly at a profit. If you want to double your investment, you can even pair your electric vehicles with your renewable energy and maximize the benefits of both tax credits.

Related: The 5 Most Luxurious Electric Cars On The Market That Will Make You Give Up Gas

3. Use tax credits to increase building efficiency

The DOE estimates that homes and commercial buildings spend about $2,000 annually on energy, and anywhere from $200 to $400 of that cost could be wasted on outdated systems. The IRA increases the 179D tax deduction, allowing small business building owners to receive up to $5 per square foot to support energy efficiency improvements.

These improvements could include new lighting, better heating, cooling, ventilation or hot water systems, and building envelopes that separate air-conditioned and non-air-conditioned parts of the building. With the new tax credit, upfront costs will be lower and your electricity bill will decrease as efficiency improves.

4. Participate in the clean energy supply chain

One of the IRA’s goals is to boost American manufacturing for materials like batteries, solar and wind parts, and carbon capture systems. Twenty companies have already received grants, many of which are focused on lithium, one of the key materials for battery production.

The legislation covers not only tax credits but also domestic procurement requirements. These domestic sourcing requirements will help ensure that every company in the clean energy supply chain has customers in the United States.

If you want to get involved in more innovative technology, the CHIPS and Science Act provides funding for the research and development needed to help these industries break through. Plus, these grants target rural areas, so you don’t have to live in an established tech hub like New York or San Francisco to start an innovative business.

5. Become part of a hydrogen hub

The Department of Energy launched an $8 billion program to develop regional clean hydrogen centers across the United States. Hydrogen hubs are helping the industry take off by bringing together equipment manufacturers, hydrogen producers and hydrogen users to create clean energy hubs in diverse geographic regions across the country.

The new grant will fund 6 to 10 hubs to be announced in Fall 2023. Keep an eye on these projects for both opportunities to get involved and ideas on where to start new businesses.

6. Keep looking for additional grants

As this money flows from law to implementation, new programs will emerge and new money will flow. For those looking to apply directly for federal funds, search “discretionary or competitive grants.” These scholarships are competitive based on set criteria. While they often go to federal agencies, they can also be awarded to private companies, nonprofit organizations, unions, and individuals, depending on the program.

Similarly, “Project Grants” are intended to fund a specific project, initiative, or service and may go to government agencies, non-profit organizations, or private companies.

Much of this funding is provided by the Department of Transportation, Department of Energy, and Environmental Protection Agency, so keep an eye out for these locations. Funding will also go to state and local programs, so check your local agencies for options. You can also follow groups like the Blue Green Alliance or try some of these tips and tricks.

Whether you’re investing in clean energy and clean vehicles for your existing business or interested in transitioning into the fast-growing clean energy industry, this new law will set you up for success. There will only be a short window of time when this level of funding will be available. So use it while you can to ensure your business is part of the net zero future.

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