With climate tech investments declining and reduced federal funding from the Trump administration, champions of the sector are calling for creative strategies and widespread participation to bolster financial resources.
“When the markets are down, you buy. So if you have funds, this is the time to join in,” said Bina Shukla, a board member with the Seattle-area, climate investment group E8. “Invest, invest, invest now.”
Climate tech has historically been a challenging sector for attracting funding. It often moves more slowly and involves capital-intensive hardware prototyping compared to software. Clean energy projects may require permitting and regulatory oversight. Scaling takes time and investors need to be patient for their returns.
Investments in the sector dropped 19% worldwide from the first half of this year compared to the same period in 2024 — though U.S. investments alone rose by about the same percentage during that time. Investments in early-stage companies declined the most, according to Sightline Climate.
Shukla spoke Thursday on a panel that was part of the annual PNW Climate Week, a 10-day regional conference focused on the clean-energy transition with events held in Seattle, Tacoma, Bellevue, Portland, Vancouver, B.C., and Bellingham.
She was joined by Gabriel Scheer, senior director of innovation for the investment nonprofit Elemental Impact, and Eli Lieberman, executive director of the recently launched Washington State Green Bank. I moderated the discussion.
Here were their thoughts on innovative funding models:
Recycling philanthropic dollars: A strategy being employed by the angel investment nonprofit E8 is to offer alternative ways of supporting climate startups, including its philanthropic impact fund, Decarbon8-US. Contributions are tax-deductible and any returns generated by investments are recycled back into the fund to support other startups.
“There are a lot of ways to support the community,” Shukla said. “For $25 you can be part of that fund.”
Spreading risks: Elemental created a program called D-SAFE (Development Simple Agreement for Future Equity), which allows the organization to spread investment risk across multiple capital projects within a single company.
If a project succeeds, the company can repay Elemental with interest, allowing the funds to be reinvested elsewhere. If a project fails, the investment converts into an equity stake in the parent company, derisking early-stage, first-of-a-kind (or maybe even 10th-of-a-kind) deployments.
“It’s been great,” Scheer said. “We’ve had a number of companies who have used that now, and it’s been a really good innovation.”
Green banks: Lieberman is running Washington’s first green bank, which uses public and private capital to fund clean energy and sustainability projects. The institution is structured to take higher risks and produce lower profits to get climate friendly technologies on the ground and in communities.
“Green banks traditionally exist more on the ‘market pull’ side, so later in the commercialization stage and in project finance,” Lieberman said. “They’ll look at their given geographic region that they operate in, and try to analyze what are the market gaps in project finance, and then what are the tools that the green bank could use to try to steer in private sector investment.”
All three agreed that despite lower levels of investing globally and a retraction of federal support, there was plenty that companies, investors, elected officials, philanthropists and others could do to continue stoking the movement to expand clean energy innovation and deployment.
“This is our opportunity,” Scheer said. “This is the time when left-leaning states, left-leaning cities, places with money — all of that is here — could do a whole bunch of really cool stuff.”
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