With the close of the Paris Climate Talks, tech titans pledging to invest in clean energy technologies, and Buffett’s Grandson starting a Berkshire Hathaway-like fund for impact investing, the question remains, how can tech solve climate change?

Cleantech investing was declared a “disaster” by Peter Thiel in 2011. Cleantech meant R&D for cleantech hardware – solar panels, wind turbines and more – but hardware is hard and the industry did not meet expectations of investors. Now, software is eating the cleantech world, starting in solar.

As a cleantech software entrepreneur, investors ask me 1. if the market is big enough and 2. question solar subsidies.

Is the market big enough?

Yes it is big and here’s why: We need to reduce carbon emission to avoid climate disaster (keep the global temperature from increasing over 2 degrees celsius).

If we don’t, the seas will rise over 20 feet and our food systems will breakdown. We can either use the same amount of energy and generate energy with fewer emissions, or we can use less energy to do the things we do.

Energy is the second largest industry in the world after war, and when you break the energy sector down, you have trillions of dollars of market opportunities. The solar industry alone is expected to be $3.7 trillion by 2025.

The goal is to take macro trends in energy and turn them into enviable trillion dollar markets for Silicon Valley. And some progress has been made to use Silicon Valley’s know-how to address climate change, but not nearly enough.

Part of the problem is simply an understanding of how the utility grid works. And to think about it in terms of other legacy industries — like telecommunications. Indeed, the grid is being disrupted like telecom was 40 years ago.

Telecom used to be copper wire and corded phones, now we all have cell phones in our pockets. The same thing is happening in electricity. We’re going from a centralized coal plant in the middle of nowhere with power lines running to the city, to every building generating electricity with consumers getting more control over the electricity they use.

Consumers have already been empowered by the devices in their hand for fitness, now there are entrepreneurs empowering consumers to be in control of their energy usage and building software tools for utilities. Nest should be only the beginning. Other companies are also doing their part to give greater control and flexibility to consumers and businesses.

  • Ohmconnect – Offers weekly payments for reducing electricity usage one hour per week.

  • Geli – Sells software to improve the efficiency of industrial batteries.

  • Energy Toolbase – Sells a solar panel installation optimization toolkit for consumers.

  • Chai Energy – Offers a fitbit for your electricity consumption with hardware and software.

  • Clean Energy Collective – Develops remote solar energy installations to offset home energy use.

  • GridCure – Sells software to optimize grid infrastructure.

Isn’t solar subsidized and uneconomical?

No. It’s cheaper to get electricity from solar panels on your roof than to buy electricity from the grid.

In all but four of the 50 cities, solar is a better investment than the stock market. Adoption of renewable energy technologies has increased despite the powers of entrenched fossil fuel interests.

Fossil fuels receive over four times as much money in subsidies than renewable energy.

G20 members are spending $452 billion a year subsidising fossil fuel production – nearly four times global spending on renewable energy subsidies – despite pledging to phase out fossil fuel support to tackle climate change.

The International Energy Agency found that fossil fuels are reaping $550 billion a year in subsidies and holding back investment in cleaner forms of energy, the said. Oil, coal and gas received more than four times the $120 billion paid out in incentives for renewables including wind, solar and biofuels.

“The huge subsidies fossil fuels enjoy worldwide gives incentives to their consumption, which means that I’m paying you to pollute the world and use energy inefficiently,” Fatih Birol, chief economist at the International Energy Agency.

DBL Investors, a venture firm based in San Francisco, have tracked the subsidies. In their report “What Would Jefferson Do?” they show that historical subsidies for fossils and nuclear is far and above what we’ve put towards cleantech.

Making the argument that early years are essential to long-term industry success, we have under-funded renewable energy. And historically, fossil fuels have received still much greater overall than renewable energy.

How to get involved

Interested and want some non-dilutive funding? Solve problems for the electricity sector and the U.S. Department of Energy will give you funding. They had $45M last year to invest and they only deployed $30M of funding. UtilityAPI received $763k of it. There is another $30M of funding for this round.

How can people get involved?

Software for Renewable Energy Meetup

Data Science for Sustainability Meetup

Energy – Environment – Tech – Career development events

Featured Image: Gencho Petkov/Shutterstock

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Can Tech Solve Climate Change?