Startups discuss innovating on the Front Range – Loveland Reporter-Herald

As cities along the Front Range strive to reach net-zero status, the emerging industries driving that shift will face challenges of scale, workforce and adoption.

That was the message Wednesday morning at the Innovating in a New Market: Challenges for Climate-Tech Startups panel at the Net Zero Cities event hosted by BizWest at The Ranch.

The panel was hosted by Bryan Wilson, the executive director of the Colorado State University Energy Institute. Panelists included Jon Jacobs, chief marketing officer at solid-state-battery company Solid Power; Eric Reinhardt, CEO of home sustainability company Helio Homes; Buford Barr, chief operating officer for public hydrogen fuel station company New Day Hydrogen; and Tim Reeser, CEO of zero-emission vehicle manufacturer Lightning eMotors.

The Front Range of Colorado has been a hotbed for climate-tech startups. Reinhardt, who founded Helio Homes eight months ago, said he feels the industry is becoming self-sustaining.

“It feels like Colorado has hit that tipping point where there is now enough infrastructure and networking to support this community,” he said. “The knowledge, talent, ideas and money are all here.”

Indeed, in the eight months it’s been operating, Helio Homes has converted more than 45 homes to all-electric, Reinhardt said. Solid Power and Lightning eMotors both recently went public. New Day Hydrogen has a process called electrolysis by which it synthesizes hydrogen without having to exploit natural gas.

However, as these and other climate-tech companies attempt to continue to grow, several obstacles remain. One key issue is how to attract a qualified workforce. At Solid Power, finding employees who know about the solid-state batteries the company manufactures has been difficult.

“Workforce is a huge problem,” Jacobs said. “There is nobody here who knows anything about it. All that talent is in Asia, because that’s where the industry has been. The rest of the world has a huge head start. That makes it difficult to compete with China, Korea and the European Union. “

The era of remote work brought on by the COVID-19 pandemic has been both a blessing and a curse for climate-tech companies.

“The pandemic helped a lot in that now I can pull talent from all over,” Reinhardt said. “But now it seems I’m paying Bay-Area-level salaries no matter where they are.”

Another issue is convincing large companies and original equipment manufacturers of the economic value of sustainability. Many companies are willing to pay lip service to sustainability but balk at investing any of their own capital into it, Reeser said.

“That’s been the fight in the backroom that occurs,” he said. “We need sticks and carrots.”
Barr said that many large companies simply have not yet put a financial value on sustainability, which makes it difficult to persuade them to change – in his company’s case, from diesel to hydrogen as a fleet fuel.

“We’re finding that the environmental, social and governance standard in and of itself does not have a value yet,” Barr said. “We’re still in a bottom-line business. It’s, ‘Can you compete with diesel now and in the near future?’ That is a challenge for any nascent technology. ”

At Solid Power, whose solid-state electric vehicle batteries are longer-lasting, less volatile and more safe than the lithium-ion batteries commonly used in electric vehicles, its goal is to make manufacturing those vehicles cheaper.

“In the auto industry, it’s all about cost,” Jacobs said. “How can you reduce the overall cost of making the electric vehicle? Our value proposition is that we will significantly reduce cost for automakers. ”

Reinhardt, whose business sells directly to homeowners, said that is less of an issue for Helio Homes. For consumers who are concerned about climate change, making their home all-electric is a relatively easy one-time action that will have an impact for the entire lifetime of the home.

“It’s not a value proposition for them,” he said. “They understand climate change is real and they really want to do their part.”

Lightning eMotors sells its zero-emission vehicles both directly to fleets and to OEMs. Reeser said that the larger companies are usually more receptive to messaging about how going green will help their bottom line.

“Commercial vehicle customers typically think about cost per mile and risk,” he said.

Both of these issues – finding qualified workers and getting companies to buy into sustainability – are constraints on the ability of climate-tech companies to scale.

“This is a scale-intensive industry,” Jacobs said. “Costs go down with volume. That’s true everywhere but especially with batteries. You need money, people and space. ”

The issue of scale in climate-tech is becoming a chicken-and-egg situation, Reeser said.

Large companies are hesitant to invest in sustainability because it has not yet reached cost parity with their current practices, which makes it hard for climate-tech companies to scale.

But sustainability will not reach cost parity without first scaling, Reeser said.

“We have to push from all sides because we can not get to total cost of ownership without volume,” he said.

What can help alleviate this? Jacobs said that establishing a domestic climate-tech supply chain that rivals the ones in Asia and Europe must be a priority. Reinhardt added that reducing friction and making these transitions easier will attract more consumers. Locally, leveraging the strong STEM programs at the University of Colorado, Colorado State University and the University of Denver could infuse talent into the industry, Reeser said.

And attracting big capital into an emerging industry will help it continue to grow, Barr said.
“I really think the money is there,” Barr said. “They’re really waiting for the market to establish itself.”

This article was first published by BizWest, an independent news organization, and is published under a license agreement. 22 2022 BizWest Media LLC.

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