As we move into a new year, Antenna’s account team members expect to see continued growth for the cleantech industry as concerns surrounding climate change, support for clean energy, and ESG regulations gain prominence. At the same time, there are a number of lingering challenges that industry leaders should be prepared to face in the year ahead.
With that in mind, we’re pleased to share our crystal ball predictions for the coming year.
What trends do you predict will take hold in 2022? Drop us a line to continue the conversation.
1. Expect “Bang for Your Buck” Investments for Government-Backed Climate Initiatives
The Bipartisan Infrastructure Deal (renamed the Infrastructure Investment and Jobs Act) and the Build Back Better bill currently pending in the Senate will provide significant new funding for carbon emissions reductions and resilience. Should Build Back Better pass, the pot could be as much as $600 billion over 10 years, not counting the climate benefits from items like increased funding for public transportation and freight rail.
While this is cause for celebration for companies operating in these industries, all companies would do well to fasten their seat belts for what could become a bumpy ride as we get closer to the 2022 midterm elections. New ideas and policies on transitioning to clean energy and reducing greenhouse gas emissions may be more difficult should Republicans succeed in taking the House and/or the Senate in 2022.
The upshot is that the federal funding for climate initiatives in the Infrastructure and Build Back Better legislation could be the last big infusions of cash for clean energy that we see until the 2024 elections. Any ideas that get enacted will need to provide tremendous emissions reductions for very limited dollars; “return on investment” will be the key metric. The Biden Administration is also likely to place a premium on climate initiatives that do not need new dollars or Congressional approval, but that can be done by changes to regulatory interpretation.
That is not to say that cleantech companies will have no options available to them should Republicans take the House and/or Senate in 2022. For one, regulatory interpretation is a powerful tool; changes to the Federal Register could provide greater clarity on, for instance, which projects qualify for which tax rebates. States are also major players in the fight against climate change. Large states like California, New York, and Massachusetts will be looking for good initiatives to limit emissions. Cleantech companies would be wise to look to states to enact their policy proposals.
– Neal Urwitz, Vice President
2. Supply Chain Might Be The Biggest Threat To Cleantech Growth In 2022
Much has been said about the global supply chain crisis in 2021. From dry goods to computer chips, everyday items have become harder to find and more expensive. For cleachtech in particular, companies across the industry ecosystem were slammed by a number of supply-related hurdles including: rising material costs, shipping delays, and trade wars, as well as demand outpacing supply.
In the solar industry, manufacturers are battling climbing costs for polysilicon, a key ingredient of crystalline-silicon PV cells that has been getting more expensive all year. This, combined with a perfect storm of shipping delays and new market entrants competing for PV materials, has caused solar panel prices to rise for the first time in years and prompted some manufacturers to request delays in panel purchasing. In fact, the price spike has prompted the Solar Energy Industries Association to reduce their U.S. solar installation forecast by 25 percent, to 7.4 gigawatts.
For electric vehicle (EV) companies, there has been a “looming shortage” of lithium, cobalt and nickel metals used in EV batteries. Current EV models are metal intensive, often requiring roughly six times the amount of minerals needed for internal combustion engine vehicles. While EV and battery manufacturers are developing solutions that are more sustainable from a supply chain and energy efficiency perspective (see: Solid Power’s solid state batteries for electric vehicles), looming material shortages threaten to slow EV market growth in the near term. Beyond EV companies, these metal supply challenges will also have consequences for stationary energy storage providers that compete with EV manufacturers and consumer electronics for the same battery cells.
With supply chain bottlenecks expected to continue well into 2022, cleantech leaders should be planning ahead and developing strategies to reduce disruption to their supply chains.
– Reed Haeckel, Supervisor
3. We’re Going To Hear A Lot More About Artificial Intelligence in Cleantech
When most people think of AI they think of virtual assistants like Siri or Alexa, but AI has countless applications that can help us tackle society’s toughest problems — and climate change is the toughest of them all.
One of the major benefits of AI is the ability to better understand and model complex systems faster than ever before. Transforming our energy system to lower carbon emissions and improve power reliability in the face of increasingly extreme weather, while also electrifying heating and transportation, and keeping energy affordable for all is an insanely complex task. And with seemingly constant reminders this year that climate change is here and with little time to overhaul our energy system, I expect we’ll see an explosion of AI in energy in 2022.
We’re already seeing AI being used to address various pieces of the energy transition. Energy traders like Trailstone Group are using proprietary AI models to better predict renewable energy generation, which makes intermittent assets like wind and solar less risky for grid operators and helps asset owners earn a premium for committing a greater amount of production further in advance. Urbint is using AI to help utilities predict and prevent infrastructure damage such as natural gas leaks and improve worker safety. AI is also the backbone of the Nest Renew program launched earlier this year to shift heating and cooling to times when energy is cleaner and less expensive. These are just a few examples of the many ways AI can help us mitigate climate change. I’m excited to see what new applications of AI take hold and make headlines in 2022.
– Rebecca Collins, Account Supervisor
4. Count On More ESG Accountability In 2022
The momentum driving widespread adoption of ESG strategies and policies picked up in 2021 — driven by pressures for business leaders to mitigate climate change and tackle social inequality. Despite the attention and enthusiasm surrounding ESG, many companies are missing the mark when it comes to meaningful metrics and reporting. Others are taking advantage by greenwashing their marketing.
For instance, a viral Tiktok recently found that although Coach’s website promotes a ‘circular economy’, their policy is to “slash” unsold merchandise (certainly not very sustainable). Similarly, businesses have increasingly promised to work towards “net zero,” but fail to specify how they’ll measure this or the type of emissions they’ll report. The reason that companies get away with vague statements or greenwashing is simple: a lack of accountability. There are currently no universal standards for reporting on and tracking climate impact. Accountability needs to hit every aspect of ESG: from carbon emissions and reductions, to ethical supply chains and health.
We’ve seen some signs that change is coming. The new International Sustainability Standards Board (ISSB) was announced during this year’s COP26 with a goal to develop “a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs.” The SEC proposed new regulations for companies to publicly disclose their climate risks.
We’ve also seen an uptick in businesses dedicated to ESG transparency. ClearTrace, a carbon accounting company, is helping the world’s largest companies stand out from greenwashing with verifiable and accurate energy and carbon emissions data. Additionally, companies are hiring ESG consultants like Cardno (now part of Stantec) which helps their clients improve their ESG standing by focusing on GHG emissions and other underreported metrics like ethical supply chains and health.
As investors, consumers, and regulatory bodies become more savvy in looking for substantiated ESG claims, I’m hopeful that we can count on more accountability in 2022.
– Ariel Marantz, Account Executive
5. The E-Mobility Transition Will Be Accelerated By Medium- and Heavy-Duty Fleets
The prospect of mass adoption and manufacturing of passenger electric vehicles (EVs) dominated headlines in 2021 – driven by pledges from top OEMs such as General Motors and Ford to produce strictly EVs by 2035. However, this focus on personal EVs is not enough to meet ambitious climate commitments set by cities, states and countries around the world. It has become increasingly clear that, in order to combat climate change as quickly as possible, the electrification of medium- and heavy-duty fleets has become an immediate, cost-effective solution that will continue to increase in terms of viability and scalability in the next year.
With research estimating that the total cost of ownership for medium- and heavy-duty commercial electric vehicles will meet or dip below the cost of conventional internal combustion vehicles by 2030, there is a clear incentive for fleet owners and operators to move towards electrifying their vehicles. While many are hesitant to make the transition — citing concerns about the high upfront cost of purchasing an EV, the complexity of fueling fleets with electricity and vehicle performance — there are commercially available technologies and business models that address these concerns head on. We are already seeing some of these solutions with companies such as TeraWatt Infrastructure, who is financing and managing EV charging infrastructure for large-scale fleet owners and operators, and ElectReon, who is providing complete end-to-end wireless EV charging infrastructure and services with projects already underway in Sweden, Italy, Germany, and Israel.
In addition to these technologies, new federal incentives and investments are making it easier and cheaper for commercial fleets to convert to electric (see: the Bipartisan Infrastructure Deal and Build Back Better bill currently pending in the Senate). States are also taking action to make switching to EVs easier. Michigan recently released a Request for Proposals for technologies that can help the state accelerate electrification efforts and meet net-zero government mandates. Utilities like Avangrid in New York are helping to offset the cost of electrical infrastructure upgrades to install commercial EV chargers through the Make-Ready program.
In 2022 and beyond, we expect to see an increase in collaboration between the private and public sectors to assist in mitigating the challenges faced by fleet owners and, as a result, increase fleet electrification to reach national and corporate emission targets.
– Maggie Mouat, Senior Account Executive