💵 Building the Infrastructure for Sustainable Finance Through Technology

In 2022, new policies opened up market opportunities: for the first time ever, the Inflation Reduction Act (IRA) made it possible for clean energy developers who earn federal clean energy tax credits to sell those tax credits to third parties for cash. 

But the new market for transferable tax credits needs standardization, accessibility for buyers, and technology and software that can scale.

And so when Alfred Johnson recognized the urgent need to enhance the efficiency of sustainable finance, he decided to take matters into his own hands.

Having spent 15 years at the intersection of finance, software, and public policy, Alfred leveraged his deep knowledge of market dynamics and regulatory frameworks to create impactful infrastructure. 

Teaming up again with Allen Kramer, with whom he previously co-founded and sold the mission-driven SaaS company Mobilize to launch Crux. 

Crux is building the technology infrastructure to make it easier and more efficient for buyers, sellers, and intermediaries (like banks, brokers, and advisors) to take advantage of the enormous opportunities now available to them in the transferable tax credit market. 

The company has raised $27 million in funding to date, including a $18.2 million Series A funding from Andreessen Horowitz, Lowercarbon Capital, Overture and New System Ventures to spur the company’s early growth. 

The Opportunities 

Crux has created the central platform for buyers, sellers, and intermediaries to connect for deals and streamline their transactions. 

• For clean energy developers, they can gain quick cash investments into their companies to fund their business growth, especially ones who might not have such a large tax liability that they’re able to tax advantage of the full credit themselves. 

• For buyers of these tax credits, it’s an opportunity to manage their tax liabilities while simultaneously meeting their sustainability goals, and contributing to continued growth of the American energy and manufacturing sectors.

A More Interconnected Ecosystem

Crux is one of the only platforms that supports all sides of the market: clean energy developers and manufacturers (sellers), corporations (buyers), and intermediaries, like financial institutions, advisors, and brokers. 

“We believe that all of these entities are necessary to build an efficient, liquid market. For transactions directly between buyers and sellers, we enable both parties to invite their advisors to the platform, to help manage due diligence or agreement negotiations. 

On the other hand, intermediaries are able to use a white labeled version of Crux to source supply or bids for their clients, ultimately managing their transactions in one interface,” says Alfred Johnson.

Empowering Transparent Tax Credit Markets

Crux’s platform and authoritative research is backed by the largest dataset in the market — over $28 billion in commercial activity in 2023 and 2024. 

These insights have enabled Crux to build market-validated standardized transaction documents and due diligence checklists, as well as a market pricing tool, the Cruxtimate, which sets a bespoke credit price based on nearly a dozen factors for each tax credit deal reflecting current market conditions.

“All of our offerings are designed to make the new transferable tax credit market more accessible, liquid, and transparent for all market parties,” explains Alfred Johnson.

Powering the Energy Transition

Crux’ latest market data analysis estimates that the transferable tax credit market is on track to reach $22-25 billion of transaction volume for 2024. 

This shows that transferability is likely to surpass the size of the traditional tax equity market — which took decades to reach this size — in about 15 months.

This pace of growth is only possible because of the technology infrastructure in place that helps buyers and sellers connect, offers market transparency which builds trust among market participants and equips them with the knowledge to enter into negotiations, and facilitates speed of transactions of all technology types and deal sizes.

Crux has facilitated deals across solar, wind, battery storage, microgrids, EV charging infrastructure, geothermal, hydropower, bioenergy, and advanced manufacturing. 

More than 500 partners have utilized Crux’s platform, which has listed $27 billion of credits since its launch early last year. Buyers have placed nearly $19 billion in bids on Crux so far in 2024.

Partnering for Growth

Crux recently partnered with the American Clean Power Association (ACP) to offer its organization of prominent clean energy policy leaders, industry experts, and companies access to Crux’s powerful technology and large network of tax credit buyers. 

Additionally, Crux partnered with Nasdaq ESG Solutions to help their client network take advantage of transferable tax credit transactions and advance their sustainability goals.

And finally a strategic partnership with Arcadia helps to accelerate the energy transition by enabling key players with the data, tools, and infrastructure they need. 

Through the partnership, Crux is able to provide Arcadia’s enterprise customers with access to its innovative transferable tax credit platform.

Looking Ahead

“Crux is increasingly seeing interest from buyers in newly-eligible tax credit categories, especially advanced manufacturing, nuclear, and renewable natural gas (RNG). And as this trend continues, transferability will power billions of dollars of investments into these clean energy projects and manufacturers,” Alfred Johnson tells us.

Crux’s overarching mission is to change the way clean energy and decarbonization projects are financed in the US. 

Transferable tax credits are just one part of that, as they support clean energy developers and manufacturers with new offerings in complementary areas of their capital stack.

Get ready to hear about their bold vision, untapped market opportunities and what’s in the pipeline for 2025 when Alfred joins us for a fireside chat at the HackSummit in New York, December 12-13th.