What is Cleantech and How Can It Stop Climate Change
You would struggle today to find anyone unaware of the effects of fossil fuels; from droughts to floods, planet Earth is cracking under the pressure of years of unbridled pollutive energy consumption. The recent IPCC report confirms that climate change is widespread, rapid and intensifying; strong and sustained CO2 emission reductions could limit the effects of climate change, but only with a sincere effort.
International collaborations, like the Paris Agreement, and internal legislation, like the UK’s Climate Change Act, have been put in place to secure reductions in CO2 emissions and encourage investment in green energy sources. Cleantech is one of the ways we can meet these goals and effect positive change for the planet we all depend on.
What is cleantech
Cleantech (or clean technology, green technology or GreenTech) is one of the fastest-growing sectors globally. The umbrella term encompasses clean energy, sustainable resources, and environmental protection projects; technological activities from recycling to wind farms is included under the term.
Cleantech responds to various Sustainable Development Goals set by the UN, by providing innovative technological climate solutions. Research and development (R&D) make these solutions possible. However, R&D is not just about coming up with ground-breaking new ideas, but also improving efficacy, reducing costs and making products and services more accessible. These types of R&D activity will lead to a stronger uptake in cleantech and a quicker recovery from our environmental crisis.
Examples of R&D in cleantech
There are many success stories for R&D in cleantech, many of which are now considered ordinary and have been accepted into wider use globally.
Solar power, through solar panels or photovoltaics, uses the sun’s energy and turn it into energy. They date back to the 1950s however have only recently become a commercial success due to constant refinement through R&D driving the prices down. In 1977, the price of crystalline silicon solar cells was around £55 per watt but has seen prices of around 19p in 2016. Research and development are to thank for the accessibility of this clean energy, as prices now match and even beat the costs for fossil fuels, especially considering government supports available for installation. The US government recently announced their plans to make solar energy responsible for near 50% of US energy consumption by 2050, demonstrating how commonplace these clean alternatives to fossil fuels are becoming.
LED lights, or light-emitting diode technology, can save up to 5% of global CO2 emissions and 1,400 million tons of carbon dioxide. The technology is widespread, cheap and effective. It achieves energy savings of 50-70% compared to the previously used technology and can cut down on a large portion of a municipality’s electricity bill. Los Angeles saved around $10 million after swapping to LED lights, and another $3 million in maintenance savings. Cleantech is not just about the obvious polluters, like petroleum oil, but also making sure everything we interact with is working as efficiently, cheaply and at as little cost to the environment as possible.
Carbon capture technologies are predicted to be an R&D priority between 2021 and 2025. Capture and storage technologies are emerging now after heavy research and development, partially funded by governments. These technologies are split into post-combustion and pre-combustion capture and have the added benefit of reducing the costs of electricity. R&D efforts in this sector can also find government support, like the US Department of Energy’s recent $3.6 million grant to Washington State University. Carbon capture and storage are incredibly important to mitigate and stabilise the effects of climate change.
How to get the most out of cleantech
Low-carbon technologies have indescribable power in creating change for our climate, however, they can only make a lasting difference with sustained investment and efforts. R&D has a habit of stalling in the Valley of Death, between research and early commercialisation. Making long-term plans to nourish R&D in cleantech can help businesses overcome these hurdles.
Understanding that R&D is a long process and years will pass before many cleantech innovations make it to the market and even longer before a profit can be made off of it. Knowing this, companies need to prepare for a long road ahead, with both the right team and ample funding. Having these strong bases will further attract more investment. Stage-gating, where projects have to meet certain milestones before additional funding can be given, will show which projects are showing early signs of success and which funding should perhaps be redirected.
Weighing R&D with IP is a tricky balancing act, as the desire to innovate can be stifled if there is little reward for the activities without IP, however, patent assertion entities can use the legal system to leach off innovative companies by claiming they’re in violation of other often-vague patents.
Funding opportunities for cleantech R&D are more and more common; alternative green energy solutions received billions in R&D investment in 2019. Solar power alone garnered $6.7 billion in investment, with $2.7 billion for wind power and $1.8 billion for biofuels. Globally, clean energy technologies are on the rise, with China looking more and more to renewable sources due to health concerns from pollutive fossil fuels. The UK spends the 8th most on clean energy investment in 2019.
Other supports are available for innovation projects outside of grant funding and private investment. R&D tax credits are a great option for reducing Corporation Tax liabilities and can even be claimed as a cash credit. Provided your project is an advancement in science and technology and the solutions are not immediately obvious to your team, you will likely qualify for this generous government-backed scheme.
Get in touch for more information
Tax Cloud is an R&D tax credit platform that guides companies in making robust, maximised claims for their innovations. Powered by industry leaders Myriad Associates, our team will be happy to advise if you are unsure if your project qualifies or have any questions about the process. Our proven success rate over 16 years means you will receive friendly, professional advice from those who know the scheme best.
Get in touch by calling 020 7360 4437 or use our contact form to talk to our expert team.
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