The election results punctuate a grueling year for climate tech and clean energy. Many businesses across the sector continue to struggle while others have gone bankrupt. Private capital in-flows to the sector declined by nearly 50% and public markets have broadly sold off the category.
The sector is also flagging when it comes to popular interest. Despite mounting and visible evidence of ongoing climate catastrophe, global warming ranks at or near the bottom of voter priorities. The price of clean electricity now beats the utility price in over half of U.S. homes, yet less than 10% of homeowners are even partially electrified.
A failure to communicate
Those of us who care passionately about climate change have excellent arguments. We have persuasive facts. But our collective efforts to engage and inspire the very people whose votes and product choices will make or break the fight against global warming are not landing.
The voter and the energy customer are the same person. And both are saying the same thing. While we can stand on the moral imperative to fix a warming planet for future generations and take a long view of the consequences of inaction, the very people we are trying to reach want it to matter to themselves — and they want it to matter now.
In the case of climate, if we want to create more support for the products and policies that can move the energy transition forward, we must listen carefully to those we need to convert about what they care most about and meet them on their terms. We stop talking about the world ending.
One particularly troubling example of a failure of communication: the Inflation Reduction Act, the landmark climate bill that will create millions of jobs across the country, was a non-factor in the election.
The IRA is stunning in its ambition and easily the most consequential climate legislation ever passed. Equally stunning is how poorly the very same administration that engineered the bill communicated its benefits to voters. Polling showed the vast majority of swing voters who tipped the election had never even heard of the bill.
That miss has consequences extending far beyond November. By failing to lash climate policy to jobs and competitiveness, we missed a golden opportunity to reclaim the energy narrative successfully hijacked by conservatives through simple and effective sloganeering — “energy independence” or “liquid gold” — linking fossil fuels to security and prosperity in the minds of voters.
As a result, key parts of the IRA itself along with other essential climate policies will be under assault in the very earliest days of the new administration.
A broken business model — and opportunity for change
Equally problematic is the residential clean energy business model is not working for customers. The bankruptcy of SunPower is the most visible example of a failed business model. But the problem is widespread across the residential sector, where growth rates are anemic and customer satisfaction is abysmal.
The industry pushes products on customers that often don’t work for their home, instead of tailoring individual product offerings that do. I have worked in the residential energy sector for nearly a decade as an operator and investor and have observed sales habits first-hand. Residential solar especially is an industry that talks a lot — via generic and dated marketing campaigns that persuade no one — but barely listens. Salespeople are not clear in their communication to customers about the increasing edge on price and resiliency their products have.
The way we are conducting business in the residential marketplace is not working. And it’s killing trust and credibility with customers.
But not all companies are failing to communicate. Those businesses who respect and value their customers should earn our support. Investors, for example, should prioritize companies that lower selling costs and tailor products to individual homeowners.
Of course, support for climate initiatives is not exclusively a messaging problem. But messaging matters and we are not close to hitting the mark.
The upcoming clean energy policy battles will test the grit of the climate movement. We should know by now to never underestimate the cynicism or self-preservation instincts of the fossil fuel industry. They see a big opening, but will likely overplay their hand. This will create opportunities for us to get back on top and shift the narrative — but it will be essential to stay disciplined to a climate-jobs message if we hope to be successful.
I began my career on Capitol Hill. A highly successful congressman I worked for once told me, “Persuading people is simple: Find out what they like. Find out how they like it. And give it to them just that way.”
As a first step toward earning back the trust we need from voters and customers, this seems a good place to start.
Steve McBee is the founder and CEO of energy transition investment firm Huck Capital and former head of a political and business advisory firm. The opinions represented in this contributed article are solely those of the author, and do not reflect the views of Latitude Media or any of its staff.
