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Implications of the Inflation Reduction Act for Clean Energy R&D and Scale-up

Weston Blundell
September 7, 2022

On August 17th, 2022, the US government passed the Inflation Reduction Act. Many companies in the clean energy space want to know how their digitization efforts can help fully leverage policy initiatives while they scale development efforts. The good news is that companies who are developing clean energy technology and advanced materials stand to benefit significantly from this legislation, particularly if they can use their digital systems to track, gain, and demonstrate visibility into the performance of their R&D programs. 

Public funding to spur private investment

The approximately 370 billion dollars allocated by the US federal government for the Inflation Reduction Act comes as a potential game changer for fiesty energy tech startups and large multinationals alike. The broad investment in energy security and climate change mitigation, which targets a 40% reduction in greenhouse gas levels by 2030, supports a variety of clean energy technologies, including battery, fuel cell, process technology, solar PV, biogas, and carbon capture technology. It aims to increase the competitive incentives to develop innovative systems and products while promoting North American manufacturing.

In a report from the US Environmental Defense Fund, it is noted that in addition to publicly funding a clean energy transition directly, the Inflation Reduction Act (IRA) is designed to catalyze hundreds of billions of dollars of investment from the private sector. Through newly created IRA provisions like the Greenhouse Gas Reduction Fund and the Energy Infrastructure Reinvestment Financing Program, along with additional support for the existing Department of Energy Loan Program (which helped Tesla expand more than a decade ago), the IRA public investment has the potential to stimulate a much greater level of private investment. These three provisions alone are estimated to amplify $38.7 billion of direct federal spending into $385 billion of private sector investment. 

Research and product development

Although some energy technology has been getting more cost competitive, there is still a heavy expense associated with developing scientific and process innovations for new and existing products. Many of the tax credits and raw dollars — which are the two main mechanisms through which you’ll see energy technology companies bolster and get funding for their solutions — will continue to go towards research and product development.

There are many technologies vying for resources (e.g. Na ion, redox flow, Li sub chemistry, green + blue H2, process tech, etc.), which means that companies still need to make the most of their R&D money — and ensure that products are not only functional, but cost competitive and functional at scale.

One challenge many companies face when they go to scale up and compete for funding is a lack of visibility into the performance of their R&D and lab programs. Questions commonly asked by investment groups include:

  • How long do specific project tasks take? How long is the overall project duration? And is there visibility into how these numbers can be improved?
  • How many customer projects successfully meet specified targets? How many do not?
  • What information and processes are used to determine success or failure?

In a recent discussion between Alchemy and a prominent corporate venture capital group, it was suggested that if companies (especially young ones) cannot track, measure, and improve to achieve their business objectives, they are more likely to become laggards in their respective industry.

One of the ways innovative companies can address this is by automatically tracking, measuring, and reporting lab performance KPIs so that they can quantifiably demonstrate the rate by which they improve outcomes and achieve their business objectives. One Alchemy customer, an EV battery startup, was able to save 30 man hours per 100 cell samples by automating data capture and parsing from lab instruments.They also reduced manual search times by 12.5 hrs per 100 cell samples thanks to enhanced view and search functions that more readily yielded key data insights. 

Scale-up & manufacturing

In addition to research and product development investment, more than $60 billion of public IRA funding will be made available to support clean energy manufacturing in the U.S. 

Included are new and extended tax credits for those companies assembling their products in North America. There are also new terms for incentives that require EV and battery components to come from North America, as well as a certain percentage of raw materials come from the United States or its free trade partners. 

We are beginning to see companies sign agreements with Canada and the US to secure a steady supply of raw materials like lithium, cobalt, and nickel. This will likely persuade automakers, battery manufacturers, and energy technology manufacturers to pivot production to the US as a way to qualify for said tax credits. 

This shift to a North American supply chain and manufacturing base will mean new suppliers, greater opportunity, and new scale up strategies for those working to compete and win. 



As a comprehensive R&D, product development, and quality management system that automates scientific data capture and integrates with production and business data, Alchemy is partnering with energy technology companies so that they can scale up by enabling them to:

  • Capture and trace R&D work for reproducing performance outcomes. 
  • Enable labs, pilot programs, and manufacturing processes to work in concert. Drive continuity.
  • Correlate nuanced material, component, process, and performance variables for failure analysis.

Alchemy is a cloud based platform for applied science R&D and product development. Our current customers developing novel energy technology include Lyten and Blue Current.

“Easy to understand system with tremendous flexibility and industry-specific workflows - the upside here is undeniable.”

- Coatings R&D Director

“Seeing that materials created in the system can be dynamically linked to create TDS/SDSs is a game changer.”

- Additives QC Technician

“The best experience was how detailed the live demos were. I rarely see such quality in a full rollout, much less a trial.”

-  Cosmetics IT Vice President

“Translating what was learned during the one-on-one sessions and actually doing it in Alchemy was awesome.”

-  Coatings Application Expert
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