The Inflation Reduction Act – How Small and Medium-Sized Businesses Can Benefit
The Inflation Reduction Act of 2022 includes $500 billion in new spending and tax breaks targeted toward climate change, clean energy, training, and workforce development, the development of clean infrastructure, and more. It puts the U.S. on a path to 40% emissions reduction by 2030 with these desired impacts: Lower energy costs Increased energy security Investments in decarbonizing all sectors Focused investments in disadvantaged communities Support for resilient rural communities Additionally, the legislation act offers businesses and entrepreneurs unprecedented opportunities but identifying these opportunities and navigating how to capitalize on them can be daunting. To help small- and medium-sized businesses understand the act, SBN Detroit held a virtual event on May 18 featuring Joel Howrani Heeres, director, Public Sector Consultants; Jerry Davis, professor, Ross School of Business; Dan Radomski, executive director, Centrepolis Accelerator at Lawrence Tech University, and Kimberly Hill Knott, president and CEO, Future Insight Consulting. Each speaker presented according to their areas of expertise, followed by a Q & A. We’ve shared some of the speakers’ points below. You can view the full event here. A significant portion of IRA rebates goes to homeowners, creating an opportunity for contractors to provide energy audits, electrification upgrades, and more. The funds allow for roughly 5,000 houses to take advantage of rebates. – Howrani There are five components involved in creating an enterprise – capital, labor, organization, supply, and distribution. The IRA creates opportunities within each of these components. – Davis When it comes to cleantech funding, it’s important to understand what stage of development you are in and how that applies to different funding opportunities. Generally, funding comes in when technologies are mature and ready for deployment. But there are different opportunities within the different stages. – Radomski As we transition to the Infrastructure Investment and Jobs Act (IIJA) there will be more investments in infrastructure, and the money will flow through state agencies and departments. – Radomski The key to being e successful with IRA funding is collaboration. Addressing climate change is multifaceted. For example, residential electrification dollars are coming. but many houses are not necessarily ready to replace fossil fuel sources with electricity. So, there is an opportunity to partner with community action agencies that manage funds for home repair to get homeowners ready. For example, the community action agency essentially does intake and prep, and a private contractor does the electrification work to use the rebates. – Howrani There are new opportunities up and down the supply chain from technicians to engineers to manufacturing. This is going to take an effort in workforce development by universities, community colleges, and manufacturers themselves. We need education in all of these areas which will lead to jobs and wealth creation. – Radomski My students surveyed local small businesses regarding their priorities around green energy. The overwhelming response was reliability. For these businesses, extended power outages could be catastrophic. This presents an opportunity – how do we solve this? – Davis Understanding that the IRA is not easily interpreted, I had my students translate parts of it into easy-to-understand How to Guides and also sample business models which can be found at Greenbiztransition.com View the full presentation and Q&A here. Be sure to subscribe to our newsletter for regular updates on sustainable business practices in and around Detroit.
Smart and Unique Sustainability Start-Ups are Making an Impact in Southeast Michigan
A hardworking number of Southeast Michigan manufacturing companies and hardware entrepreneurs are getting their start at the Centrepolis Accelerator, a nonprofit business facilitator providing access to key resources, a collaborative community, product development, and manufacturing experts with an impetus to keep manufacturing in Michigan. Launched in 2017 by Lawrence Tech, the City of Southfield, and the Michigan Economic Development Corp. (MEDC), the accelerator focuses largely on the areas of climatech, cleantech, and the circular economy. SBN Detroit spoke with two woman-owned sustainability businesses working with Centrepolis to gain insights on the whys and the hows regarding their industry choice, go-to-market objective, and their start-up paths and challenges. NexTiles, a Black-, woman-owned Detroit-based textile recycling, and secondary use company uses textile waste from Detroit’s automotive and apparel manufacturing industries to make eco-friendly building insulation that can reenter the circular economy at the end of its life. The founder and CEO is Madeline Miller. Pivot Materials is a millennial-woman-owned Detroit-based social impact business that specializes in providing sustainable biomaterials by upcycling agricultural waste, including bamboo fibers and rice and coffee hulls. The co-founder and CEO is Kylee Guenther. Q: How did the concept of your business come about? Miller: I was at the University of Miami doing my graduate studies in marine and atmospheric science. My undergrad was in environmental science, and I didn’t know exactly what I wanted to do with my education, but I started studying ocean plastics and then landfill waste and developed an understanding of manufacturing overconsumption and the waste it creates. I then started an internship with a New York-based textile recycling company and began brainstorming secondary uses for this textile waste. I came up with the insulation concept and it stuck. I’ve now been able to combine my Ph.D. research at the University of Michigan School for Environment and Sustainability around the energy burden with the corresponding demand for insulation. It’s been an awesome fit and direction for me. Guenther: My co-founder Raju Patil and I combined our childhood experiences into the mission of our business, Pivot Materials. I’m the second generation in my family to work in Michigan’s plastics industry. I grew up on the shop floor learning about plastics from the bottom up. I’m so proud of my dad and his career, which spanned about four decades in the plastics industry, but even as a kid I was mortified by the amount of waste he helped create. Raju grew up the son of a rice farmer in rural India and had similar feelings about the waste created by the agricultural industry. One-third of all black carbon emissions globally are created by crop burning. We thought we could work on both issues together so we started using agricultural waste to reduce plastic usage while also reducing the amount of agricultural waste that gets burned or sent to landfill. Q: Why sustainability? Miller: Textile waste consumption needs to be slowed drastically and the overwhelming amount of manufacturing waste in the atmosphere needs to be addressed. Our natural resources are being impacted and people are being impacted. They will continue to suffer if we don’t slow down. I want to change lives for Detroiters by using locally manufactured building insulation to create clean jobs, decrease the utility burden on families, increase diversity in the energy industry, divert textile waste from landfills, and contribute to the growth of the circular economy. Guenther: I often repeat in my head “be the change you want to see in this world,” and that’s driven my passion for sustainability. I think it’s absurd that only about 9% of all plastics created get recycled. I also know that plastics aren’t going anywhere. They’re too embedded in our lifestyles and plastic makes a lot of money for a lot of people. So, my passion is to transition away from as much plastic usage as well as other non-sustainable materials while also helping reduce the environmental impact of agricultural waste. Q: Please walk us through your start-up process and your work with Centrepolis. Miller: When I transitioned from Miami to Detroit and had the idea to start the business, I began working with TechTown Detroit. They familiarized me with customer discovery process and helped me to identify challenges and opportunities for my business. Centrepolis has been extremely helpful in the product development process. After we got over the hump of exactly what we wanted to make, Centrepolis came in and helped me identify a plethora of resources, including warehouse space, equipment, product treatment packaging, and marketing. Guenther: I’m really happy to see that Dan Radomski, executive director of Centrepolis started an accelerator specifically for product-based companies. This has been missing in the ecosystem. For us, I think the biggest benefit from Centrepolis has been working with our mentor and Expert-in-Residence, Richard Broo. Richard is a plastics industry veteran with about 40 years of experience in material sciences and project management. Sometimes we have an issue that we think is huge, and he can solve our problem in about two seconds and reassure us that it’s no big deal. This helps us save a lot of time as we grow our business, and it gives us someone to learn on. Q: Are you focused on business-to-business or business-to-consumer? Miller: I work with both. The first part of my business is waste collection and recycling. Here I focus on the automotive and textile industries, so this is B2B. A portion of that waste is then upcycled into eco-friendly insulation, a product I ultimately plan to sell to consumers. Guenther: We’re B2B. We sell our materials to brand owners and manufacturers who already use plastics or are looking to create a greener new product. Q: What are your biggest challenges? Miller: Communicating the value of our business to manufacturers is one of our biggest challenges. There is so much volume when it comes to waste, and it’s cheaper to take it to a landfill than to collect and process it into a new product. Some companies are at the
The Centrepolis Accelerator – Working to Grow Manufacturing and Bring Sustainable Opportunities to Michigan
On the campus of Lawrence Technological University, the Centrepolis Accelerator is focused on the growth of Southeast Michigan’s small manufacturers and hardware entrepreneurs, largely in the areas of climatech, cleantech, and the circular economy. Centrepolis, a uniquely positioned nonprofit business facilitator, provides access to key resources, a collaborative community, product development, and manufacturing experts with an impetus to keep manufacturing in Michigan and thus bring Michigan manufacturers and companies new opportunities. Executive Director Dan Radomski previously held COO and chief strategy officer positions with Optimal Inc.– a Plymouth, Mich., based firm focused on product development, competitive benchmarking, and vehicle engineering. In a prior role as VP of industry and venture development at NextEnergy, Radomski led incubator services and market and technology analytic efforts to support the growth of early-stage and mature energy technology firms in areas such as wind, solar, advanced batteries, power electronics, vehicle electrification, smart grid, microgrid, natural gas, and energy efficiency. SBND spoke to him about the work Centrepolis is doing toward cleantech, climatech, and the circular economy as well as keeping development and manufacturing in Michigan. Q: What exactly is Centrepolis? A: The Centrepolis Accelerator is accelerating the growth of Southeast Michigan’s small manufacturers and hardware entrepreneurs with an emphasis on the circular economy. It’s the only incubator I’m aware of that offers in-house design, engineering, and prototype capabilities, plus access to funding, experts, customers, and strategic partnerships. If an inventor, start-up, small business, or manufacturer has an idea for a product, we are the place to come to get help in design, engineering, prototyping, testing, and prepping to manufacture. We work with many different individuals and entities. Some have engineering backgrounds and many do not. Designing out cost while ensuring durability and reliability in products are common challenges faced when bringing a new product to market. We harness the manufacturing expertise that’s so prevalent in Michigan and connect corporations and individuals to get more products developed and manufactured in Michigan. Q: How did Centrepolis come to be and what’s the impetus behind it? A: I grew up as a machinist working in my Dad’s machine shop. He and his friends made solid careers and good lives for their families as machinists. I’ve worked for small, midsized, and international product development firms and manufacturers throughout my career. Over the years I’ve seen a significant increase in outsourcing to China and started thinking about the future of my family and of other Michiganders. I felt like we needed a program to keep manufacturing in Southeast Michigan and help people who don’t have the engineering know-how. So, in 2017 we launched Centrepolis – the state’s only hardware accelerator program – with Lawrence Tech, the City of Southfield, and the Michigan Economic Development Corp. (MEDC). I also had some experience working with the Michigan Department of Environment, Great Lakes, and Energy(EGLE) so I took the idea to them. They said if the accelerator focused on cleantech hardware they would be interested in helping to fund it. I said we will focus not only on cleantech but also climatech and circular economy products, which came to be our C3 Accelerator program. Q: With whom do you work? A: This is another way we differ greatly from other incubator programs. Most incubators focus on helping start-ups only, but we offer services for all entrepreneurs whether they are an individual, a start-up, or established small businesses. Many would be surprised to know that 40% of our clients are established small businesses. We offer support on three levels essentially. First, we assist with customer discovery, competitive landscape research, and the securing of patents and trademarks. We also offer tactical support such as business strategy, and connections to customers, strategic partners, suppliers, and manufacturers. With some clients, we engage more deeply in the entire process, from investment to design to engineering to prototype to product launch. As we all know, there are solutions around sustainability globally, so we crowdsource and hunt down the best innovations in sustainable materials and recycling technologies and bring them into Michigan to partner with companies such as Whirlpool and Steelcase, among others. We have brought several companies with really interesting technologies focused on waste removal into Michigan to partner with manufacturers here. Q: What are some examples? A: Savormetrics is a great company in Canada. They are an award-winning AI-sensor company that provides Quality Assurance/Quality Controls systems to the food and agriculture industries to prevent food waste in food production, processing, and distribution. They have partnered with vertical farms and food processors here in Michigan and built solutions for vertical farms that increase yields by at least 30% and decrease operating costs by over 50%. Glacier is a very compelling recycling automation start-up in San Francisco that is developing a new robotic sorter for material recovery facilities that performs just as effectively as other robots, at a much lower cost and smaller footprint. We have facilitated funding for them through EGLE and partnerships with local material recovery facilities. Centrepolis also gained funding for local companies like Detect-It in Oak Park, which offers software that now helps to sort textiles such as end-of-life waste clothing and separate materials cotton from synthetic materials to improve recycling. Q: How are LTU students involved? A: We have five interns who are student workers. They help with business strategy as well as product design, engineering, and prototyping I can point to the Glacier recycling automation here. We are activating students now to help engineer and design a new end effector for robotic arms to help sort plastics for improved rates of recycling. Q: What does the future look like for Centrepolis? A: To continue getting more and more products made in Michigan. We currently have over three dozen products that have come out of Centrepolis that are completely made in Michigan. I’m also very proud of the fact that 366 of our clients now provide contracts with Michigan suppliers equating to over $24 million in business to the local supply chain. That’s an amazing amount of business and illustrates the economic multiplier of
