When the results of today’s election start to come in, climate tech founders will be thinking about the two scenarios that face their startups. One, a president who believes in climate change and is likely to support solutions. Two, a president who has called climate change a hoax and said he wants to “terminate” green spending.
“This isn’t a surprise—we’ve known we’re going to end up here. And so we’ve done a lot of planning for both outcomes,” says Sam Calisch, CEO of Copper, a startup that makes an induction stove with a battery designed to make it easier to use and that can double as new energy storage for the electric grid. “I obviously have one that I prefer. But I think it’s a sign of a durable business model to be resilient in case, and so we’ve been doing our best to set ourselves up for success there.”
This is one of thousands of climate tech companies that could be impacted by the result of the election. The massive climate law that passed under the Biden administration, the Inflation Reduction Act, has spurred hundreds of major new clean energy projects over the past two years, from electric-vehicle and solar-panel factories to large-scale wind and solar projects. The law also includes tax incentives and rebates for consumers to electrify their homes with tech like the Copper stove.
Trump has suggested that he wants to dismantle the IRA, though it’s not clear how much he would actually be able to accomplish. Project 2025, the conservative playbook that suggests what Trump should do in a second term, calls for repealing most of the IRA and the Bipartisan Infrastructure Act, which also contains support for clean energy projects. If Trump is elected, billions of dollars from the laws could still be unspent by the time he takes office. Trump has said that he wants to pull back any unspent dollars and repeal the IRA’s tax credits.
To undo the law, he’d need the support of Congress. The majority of large, new clean energy projects are happening in Republican congressional districts, producing thousands of new jobs. Some House Republicans recently voiced support for the law’s clean energy credits. Still, it’s possible that if Congress is controlled by Republicans, they could choose to vote against their own constituents’ interests. (No Republicans voted for the law initially, though many have taken credit when they’ve visited newly built clean-energy factories.)
Even without a repeal of the law, Trump could reallocate some funds. For something like EV tax credits, his administration could tweak Treasury rules for which cars qualify—so fewer people can use the credits. And his administration could potentially just stop handing out funding to states; one analysis from Columbia University says that states would have little recourse to sue until 2031, the year that all the funding is due. A Trump administration might even try to take back funds that have already been awarded. Legally, that’s unlikely to succeed, but it could make it harder for projects to move forward.
“With Trump, I think the concern is uncertainty: We don’t necessarily know what he’s going to do,” says Dan Schnitzer, CEO of SparkMeter, a company that makes software to help utilities make the electric grid more resilient. It recently received two grants from the Department of Energy to help utilities begin to use its newest technology.
If Trump wins, “we wouldn’t be surprised if we saw a significant pullback from private investment into the space kind of broadly,” Schnitzer says. “There’d be sort of a wait-and-see period . . . that’s just going to limit investor financing, that’s going to obviously limit public financing. So I think that there’s just going to be less appetite from utilities, from developers, and from technology companies to take new risks on new innovations.”
Still, VCs say that they plan to keep moving forward. Venture capital “remains bullish on investing in climate tech companies regardless of who is in the White House, given the importance of climate tech to the global economy,” says David Miller, managing partner at the VC firm Clean Energy Ventures. “And, just like we saw eight years ago, investors will continue to fill in the gap to support the sector.”
But Miller also says that a Trump presidency risks ceding the U.S.’s leadership in climate tech to China. “Continuity of the Inflation Reduction Act is critical,” he says. “If the IRA continues as planned, that will significantly mute the projected damage to the climate tech sector from a Trump administration. However, if Congress and a Trump administration decide to hamstring the legislative accomplishments of the Biden administration, that could have a disastrous impact on the sector in the U.S. and slow down the growth of domestic manufacturing.”
By contrast, under Harris, the space is likely to continue to grow quickly. “I think in all likelihood we would see a continued prioritization of this kind of Biden-ish industrial policy meets climate action that was the trademark of the IRA,” says Copper’s Calisch. “I think we’ll see more of that now that it’s been proven that you can support climate while having solid domestic policy, generating jobs, and spurring innovations.”
As Copper has planned for a potential Trump presidency, Calisch says the company has focused on tax credits rather than rebates, which might be more likely to be on the chopping block. “By far, the biggest incentives associated with Copper’s products are the available tax credits,” he says. “So in the case where rebates are not available, that’s totally okay.”
The startup, like many others working on climate tech, has also tried to create a product that consumers want because it’s just a better, well-designed option, separate from the climate benefits and government incentives. “We designed a product that we believe to not be contingent on who’s in the White House,” Calisch says. “We’re delivering solid value for people with or without these incentives, and so we have to fall back on that. We’re getting dangerous pollutants out of people’s homes. We’re allowing people to have more agency over where and how they’re getting their energy and increasing consumer choice. And I think all these things, from safety to these kind of liberties, are relatively bipartisan.”