Welcome back to The Sunstone Way.
I love to talk about how government invests in our community. I also love to talk about how California leads the country when it comes to innovation.
And I get really excited when the two come together as we help to energize our world with clean, sustainable power. I am excited today.
Bet On The Future
California has been the nation’s leader on the environmental front since the 1970s, when the environmental movement really took off. Did you know that it became state law in the early 1980s that public utilities had to purchase power from small independent producers, including renewable energy?
In 1996, the state began offering incentives for people to install solar power for their homes. Ten years later, the solar initiative significantly expanded, and the legislature passed the landmark Greenhouse Gas Reduction Act, Assembly Bill 32.
And don’t forget that the state established the California Infrastructure and Development Bank (IBank) more than 30 years ago specifically to support Public-Private Partnerships. Check out the blog from a couple of weeks ago in case you need a refresher.
Loan Guarantees
One of the ways the IBank supports clean energy development is through loan guarantees. If a company or entrepreneur needs to borrow money but might have trouble qualifying for a conventional loan – often because they are using new or unproven technology – the IBank can guarantee up to 80% of the loan will be repaid even if the company defaults.
Those programs are called the Climate Tech Finance Loan Guarantee and the Climate Loan Guarantee. The IBank does its due diligence to make sure the borrower is a good risk, but their guarantee helps lenders justify loans that might not make it otherwise.
Several other government agencies also provide loan guarantees; the Small Business Administration and the federal Department of Energy both use that process. The Department of Energy also offers grants.
Grab The Grants
There’s only one downside to loans and loan guarantees – you have to pay the money back. But when you get a grant, all the money goes to making your technology work or building your infrastructure.
Grants from the government long have played a big role in scientific development – the federal government was the single largest research and development client in the country from World War II to 2017, and remains the largest funder of basic research in many fields.
California’s government agencies also strongly support energy R&D through grants. The IBank has its own set of grants, and there are more from other sectors of the state government. Here are a few.
- The California Energy Commission provides grants and incentives to advance clean energy generation, use efficiency and transportation.
- CalSEED (California Sustainable Energy Entrepreneur Development Initiative) is a CEC program specifically designed to help early-stage clean energy entrepreneurs accelerate commercialization of their ideas.
- CEC helps local governments and nonprofits with grants to implement energy efficiency and climate adaptation efforts.
- The California Public Utilities Commission offers grants to community-based organizations primarily in Los Angeles County for education in use of clean energy at home.
On The Road Again
California, and the greater Los Angeles area in particular, was the first in the country to try to promote alternative vehicle fuels as a way to control air pollution. An air pollution control district was created way back in 1947. By the early 1990s, the state was offering rebates, tax credits and perks like allowing single drivers in carpool lanes for alternative fuel and low emission vehicles.
Today, there are state incentives to help develop the necessary electric and alternative fuel charging networks. Research grants are still available for work on more fuel alternatives like hydrogen, biodiesel and more.
The number one source of greenhouse gases worldwide today is the generation of electricity. Vehicles are a close second, and the transportation sector remains the top generator of carbon dioxide emissions in the United States.
California’s government agencies have stepped up to help entrepreneurs and scientists come up with answers, and we are here to walk beside them in a P3 effort. Because that’s the Sunstone Way.
And remember, always be a Sunstone!
John Keisler
CEO & Managing Partner
Sunstone Management, Inc.
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