Idealab’s Bill Gross Calls Climate a Trillion-Dollar Opportunity

Bill Gross, founder and CEO of technology incubator Idealab, believes that the Inflation Reduction Act could facilitate a whole host of innovative climate mitigation companies.

Bill Gross
Bill Gross at Worth Techonomy Climate Solutions 2023. Credit: Lorenzo Bevilaqua

From 2003 to 2021, Bill Gross’s Idealab helped fund 18 eco-friendly companies. In the last year alone, he’s helped fund six. Last month, Gross joined us at the Techonomy Climate NYC: Solutions that Scale conference to share his insights on renewable energy, technological progress, and the government funding that helps make it all possible.

Gross founded Idealab back in 1996 as a “technology incubator” that has invested in a variety of innovative properties, including and photo-manager Picasa. In his Techonomy presentation, Gross highlighted some of Idealab’s eco-friendly investments, including eSolar, Thermata, and Energy Cache.

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In a compact 11-minute presentation, Gross discusses the decreasing costs of renewable energy, as well as how entrepreneurs can take advantage of incentives from the Inflation Reduction Act.

First, Gross covers how energy production has skyrocketed since the Industrial Revolution, due to both increased mechanization and a growing population. However, while humans require more and more electricity for a comfortable society, they are unwilling to pay more money for “clean” energy. That’s why Gross called 2018 a “turning point,” as it marked the first time that wind and solar energy became cheaper to produce than energy from fossil fuels.

To help explain why renewable energy has become so much cheaper, Gross cited Wright’s Law—a predecessor to the more-famous Moore’s Law. While Gordon Moore’s axiom predicts the rapid efficiency gains of computer chips, Wright’s Law is more general. As production volume increases, a new technology experiences a “learning curve,” which increases efficiency and drives down costs over time.

According to Gross, these decreased costs can work hand-in-hand with incentives from the U.S. government to create his “trillion dollar opportunity.” The Inflation Reduction Act provides more than $270 billion in green energy tax credits, which Gross believes will kickstart ecologically responsible—and profitable—businesses. To illustrate this point, he discusses two companies that Idealab has funded: Carbon Capture and Energy Vault.

Carbon Capture employs direct air capture (DAC) machines that draw carbon dioxide out of the atmosphere. These rectangular devices, each about the size of a shipping container, use solid sorbents to bind CO2 through either physical or chemical means. Then, the DAC machines redirect this CO2 to industrial applications, such as creating concrete or fuel. The Inflation Reduction Act provides a $185 tax credit for each ton of CO2 removed from the atmosphere, which Gross calls “a fantastic incentive.”

Energy Vault, on the other hand, uses a novel form of “gravity storage.” This process involves a tall building that contains dozens of 30-ton blocks. Using a renewable energy source, such as solar panels, a system of cranes raises these blocks to the top of the structure, building up potential energy. To generate power, Energy Vault can lower the blocks, turning their potential energy into kinetic energy. This system also benefits from an IRA tax credit: $45 for every kW-hour of energy stored.

Gross’s presentation concludes that “almost every part of the energy business can be disrupted with new technology,” which could interest both technologists and investors alike.