With a month of hindsight, we’re getting a better picture of what the Inflation Reduction Act will mean for the American economy and the climate tech sector itself.

The new law caught many by surprise, both in the climate tech space and elsewhere. Few had thought sweeping climate legislation was possible. The final bill is not quite as comprehensive as some had hoped, but it has created a series of incentives that promise to bolster innovation and manufacturing throughout the U.S. economy.

While a lot of pixels have been lit over the extension and expansion of electric vehicle tax creditsit’s an important provision! — some of the biggest shifts will likely stem from the myriad incentives the law offers homeowners and property investors to upgrade their buildings.

In my conversations with founders over the last few weeks, nearly all of them have said the IRA, as it’s now confusingly known, has given their businesses significant tailwinds. Part of that optimism and confidence stems from the fact that the IRA approaches electrification and energy efficiency from a variety of angles, giving the market a jolt of supply- and demand-side signals that should support later-stage startups while spurring new founders to get in the game.



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