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The New York-based startup aims to create a market for clean energy tax credits.

One of the least-noticed changes in the Inflation Reduction Act may be one of the most important.
For years, the government has encouraged developers, power utilities, and other companies to build clean energy by offering tax credits. But those tax credits were difficult to transfer to other companies, meaning that complicated financial instruments had to be created to allow them to share in the wealth.
The IRA continues to employ tax credits. But for the first time, it allows companies to buy and sell tax credits to each other.
A new crop of startups have appeared to help companies trade these new “transferable” tax credits. One of the largest is Crux, a New York-based startup backed by Andreessen Horowitz and Lowercarbon Capital.
On Tuesday, Crux announced that it has now brought some of the country’s largest energy developers into its fold. Clearway Energy, Intersect Power, Pattern Energy, and Électricité de France (commonly known as EDF) have all made strategic investments in Crux, the company announced. It had not previously disclosed their involvement in January’s $18.2 million Series A round.
“We had an opportunity to bring in some of the leading developers who collectively represent a pipeline of more than 100 gigawatts of power,” Alfred Johnson, Crux’s CEO, told me.
Crux has now raised more than $27 million in capital since its founding early last year. The offshore wind developer Orsted, as well as the energy developers LS Power and Hartree, have previously joined as strategic investors.
Under the Inflation Reduction Act, as in the past, companies can claim money on their taxes by building zero-carbon electricity generation, new factories, buying electric vehicles, and more.
But energy developers and utilities rarely need to use all the tax credits that they generate from their projects. A $30 million solar farm might generate as much as $10 million of tax credits, for instance — far too much for most companies to use in a reasonable amount of time.
That meant that developers had to bring in a third-party firm — usually a bank or another financial institution — that could pay for the privilege of using those tax credits. Before the IRA passed, many clean energy projects were therefore structured as complicated “tax equity” deals, where the bank or tax credit “buyer” owned part of the project so that it could claim its tax credits. About $20 billion in tax equity deals happened last year, according to research from the law firm Norton Rose Fulbright.
The IRA aimed to make that process easier by, in essence, creating a market for tax credits.
Crux estimates that $7 to $9 billion of these new “transferrable tax credits” were sold in that new market last year. It believes that the opportunity will grow rapidly. The advisory firm Evercore has projected that the transferrable tax credit market could exceed $100 billion by 2030.
Crux is not the only company that hopes to capitalize on that burgeoning market, potentially speeding the energy transition at the same time. Basis Climate, another New York-based startup, is also trying to serve as a key platform in the space.
Ilmi Granoff is an expert on climate finance, a senior fellow at the Sabin Center for Climate Law, and an advisor to Basis Climate. “The market is going to be diverse and large enough to support a number of pure play platforms that are specialists in this — and you’re going to have the banks moving in, consultancies, the tax advisors, and more,” Granoff told me. “For those looking for an environmental commodities market that really drives climate change, you can stop looking at the voluntary carbon market and just monetize the tax credit market for carbon solutions. It is going to be a very reliable market, backed by the government.”
Johnson, the Crux chief executive, also pointed to the scale of climate-related investment on the horizon. “We just have to build so much in the next 10 years. The level of infrastructure investments that have happened up to this point — and the scale of what will be built — is really, really dramatic,” Johnson said.
Crux’s product is a standardized platform where developers, utilities, and manufacturing companies can describe and sell their tax credits to buyers.
When a buyer first uses Crux, all tax credits available on the service are presented anonymously. They can then anonymously contact a specific seller. The buyer and seller can gradually reveal information to each other throughout the ensuing negotiation, culminating in a Crux-hosted “data room” where each teams’ accountants and lawyers can trade and view documents relevant to the sale.
“This is not a point and click transaction,” Johnson told me. “These are still complicated transactions with lots of moving pieces, with many underlying documents and lots of stakeholders at the table.” The goal of Crux, he said, is to make these transactions “efficient and standardized.”
The company says it’s already having some success speeding up the average sale. It recently facilitated a deal between an electricity utility, which was selling tax credits, and a Fortune 100 company, which was buying them, in just 22 days, Johnson told me. By contrast, a traditional tax equity deal would take six to nine months to structure and close, he said.
Many of the company’s leaders once helped shape high-level Democratic policy. Johnson, a former White House aide under President Barack Obama, was deputy chief of staff to Treasury Secretary Janet Yellen until 2022. He and Crux’s cofounder, Allen Kramer, previously cofounded the startup Mobilize, which helped organizations manage and recruit volunteers.
William Daley, a former Obama White House chief of staff and Commerce Secretary under President Bill Clinton, joined Crux as a senior advisor last week.
In an interview, Daley told me that — with the defense industry excepted — he could not remember the government investing in a strategic industry the way it is now investing in clean energy. “These are economic decisions that investors are making — they’re not just going out there and doing things that may or may not be financially rewarding,” he told me. “For every dollar the government puts forward in a subsidy or credit, the private sector is investing $5.”
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And more on the week’s biggest fights around renewable energy.
1. Benton County, Washington – The Horse Heaven wind farm in Washington State could become the next Lava Ridge — if the Federal Aviation Administration wants to take up the cause.
2. Dukes County, Massachusetts – The Trump administration signaled this week it will rescind the approvals for the New England 1 offshore wind project.
3. Washtenaw County, Michigan – Michigan attorney general Dana Nessel waded into the fight over an Oracle and OpenAI data center in a rural corner of the state, a major escalation against AI infrastructure development by a prominent Democratic official.
4. Nacogdoches County, Texas – I am eyeing the fight over a solar project in this county for potential chicanery over species and habitat protection.
5. Fulton County, Ohio – In brighter news for the solar industry, Ohio is blessing more of their projects.
A conversation with the co-chair of the House Sustainable Energy and Environment Coalition
This week’s conversation is with Rep. Sean Casten, co-chair of the House Sustainable Energy and Environment Coalition – a group of climate hawkish Democratic lawmakers in the U.S. House of Representatives. Casten and another lawmaker, Rep. Mike Levin, recently released the coalition’s priority permitting reform package known as the Cheap Energy Act, which stands in stark contrast to many of the permitting ideas gaining Republican support in Congress today. I reached out to talk about the state of play on permitting, where renewables projects fit on Democrats’ priority list in bipartisan talks, and whether lawmakers will ever address the major barrier we talk about every week here in The Fight: local control. Our chat wound up immensely informative and this is maybe my favorite Q&A I’ve had the liberty to write so far in this newsletter’s history.
The following conversation was lightly edited for clarity.
Okay, so to start, how does the Cheap Energy Act fit into the bipartisan permitting talks?
There are two separate theories about how Congress is supposed to work, and neither of these theories is universally true but I think they inform two different approaches: do you believe the purpose of Congress is to craft good policy and then put together political consensus to put that policy forward or do you think the purpose of Congress is to find where political compromise exists and then advance the policy that can proceed along that constraint?
Depending on the situation you take Door 1 or you take Door 2.
What Mike Levin and I have tried to do with our Cheap Energy Act is to say, let’s identify the barriers to deploying cheap energy in the United States, let’s try to find the policy that’ll help consumers first and then try to get that policy done. That approach – because of the way our politics is geographically sorted out in our country – implies a wealth transfer from energy producers to energy consumers. And energy producers in this country tend to be dominant in Republican areas. That’s where coal mining is, oil and gas, logging. And energy consumers are where the population is, which skews Democratic. So on a bipartisan basis you really can’t put consumers first because that is detrimental to producers.
I think that’s why you have these two different approaches going on. I guess I have a bias towards our approach but I think we have to be very candid that the other approach does not remove the barriers to cheap energy. It removes the barriers to dirty energy.
To an overwhelming degree, and I’m slightly exaggerating, but there really aren’t permitting barriers to clean energy. There are a lot of permitting barriers to dirty energy. Which is not to say you can’t weaponize the permitting system to stop clean energy from going forward. But if you’re building a solar farm and it has to have a wire that connects it to a load, your environmental footprint is very small.
Now we’ve done some things in our bill to pre-identify corridors where there is minimal species disruptions, minimal disruption of historical artifacts, and say these are corridors where you can build things fast without guessing. Let’s not kid ourselves here: the Antiquities Act exists for a reason, the Endangered Species Act exists for a reason, and the Clean Water Act exists for a reason. But the footprint of those projects environmentally is just much, much smaller than an oil rig and a pipeline and a refinery because all of those things have the potential to leak nasty chemicals that permanently defile the air, land, and water in the vicinity.
The challenge that manifests through permitting is that if I want to lower your cost of energy, that means by definition I am undercutting your current energy provider. For the most part, that provider has undue power over whether or not you get a permit. And they have an incentive to start pamphleting the neighbors around a new transmission line, for example, to say a line is going to lower people’s property values. That’s because it is an economic threat. The reason I know that’s not an issue is you never see utilities struggle to get a new wire.
I previously reported on how the biggest sticking point in bipartisan permitting talks underway today is whether Republicans will go for tying Trump’s hands in his pursuit to stop federal renewable energy permits. Do you think any GOP lawmakers will actually do that?
Ignore whatever politics someone might have. If you’re representing a district that had a ton of wind power, not a lot of load, and you live 200 miles from a major urban center that was paying a lot for electricity, you would probably be very supportive of making it easier to build the wire to access that market and making it easier for the wind turbines to go up.
I have just described the entire Iowa congressional delegation.
Let’s say in the next election, we flip some of those Iowa seats and now what was Republican is now a Democrat, that wouldn’t change the interests of the Iowa delegation. It would just change the party. So there’s reasons why [Iowa Republican] Randy Feenstra and I have led letters on trying to build SOO Green, this high voltage transmission line that would solve exactly the problem I described there. That’s not because he’s a Republican – it’s because it is in the interests of his community.
But then why do we see so few Republicans standing up to the president in his fight specifically against renewable energy, at least in the permitting talks?
We have a huge problem with the White House that they’ve been entirely captured by the interests of energy producers and they have a rooted interest in making the price of energy expensive. The reason why they’re blocking wind permits, and the reason why they’re accelerating oil and gas exports, is because they’re completely captured by people who want the price of oil and gas to be high and they lose money when the price is low.
But that’s a completely separate series of problems.
Within the House, the leadership of the Democratic Party represents concentrated areas that would like the price of energy to be cheap. The leadership of the Republican Party represents oil and gas extractive areas that would like the price of energy to be high. So a rank and file member of the Democratic Party has no particular problem advocating for energy consumers because they’re not crossing leadership. A rank and file member of the Republican Party has no particular problem advocating for the interests of producers because they’re not crossing leadership.
I think where there’s a slight distinction is you can identify any number of Democrats from the oil and gas patch who will regularly vote with the interests of oil and gas producers, and leadership will understand why they are doing that. But it is much harder to identify members of the Republican Party who are advocating for the interests of consumers and get a pass from leadership to do that.
Mmm. So to close the loop on this, how much of a priority is it for Democrats that whatever bipartisan permitting deal is made won’t be used to speed things up for fossil while Trump continues to put the brakes on every little thing a renewable energy permit requires?
Look, I’ve seen nothing out of the House or Senate that wouldn’t do exactly what you just said. Everything would make the price of energy more expensive and make it harder to do reasonable and thoughtful environmental review. In the House and Senate as currently constituted, we are not going to get a good bill that comes through.
I think within the House you have a growing awareness that energy prices are a problem. Certainly the recent elections in New Jersey and Virginia have made that clear. You need to have a strategy to bring energy costs down. That does create an opportunity prior to next November where folks say, can I do something to help my community?
We’ll see when this bill ultimately gets out whether we get much support. I’ll say we’ve privately found Republican support for pieces of it. The way we fix this problem is by doing what the Republican Party used to be known for, which is competition. There’s no reason why we couldn’t incentivize utilities to make money by saving their consumers money. Or incentivize various pieces of the energy industry to better interconnect their markets so you could always choose the lowest cost option because Adam Smith is a god. Those arguments play much better with Republicans in states that have heavily deregulated. There are individual pieces where we’ve found Republican support. And if you think good policy and economics wins, let’s make good policy and economics wins and build support for it.
Last thing – you said there aren’t permitting barriers to clean energy. But in my reporting, I’m constantly covering local communities opposing renewable energy projects, transmission siting, battery storage. It’s a major barrier to development.
What role do you think the federal government and Congress has in dealing with the issue of local control?
It’s an old saw: depending on the issue, I’ll tell you that I’m supportive of states rights.
There are huge chunks of our energy system that should be federalized but aren’t. As an example, it makes no sense that if you want to build a gas pipeline across multiple states in the U.S., you go to FERC and they are the sole permitting authority and they decide whether or not you get a permit. If you go to the same corridor and build an electric transmission line that has less to worry about because there’s no chance of leaks, you have a different permitting body every time you cross a state line. That’s only because of laws going back to the 1930s that gave FERC sole authority on gas but not on the electric side. Our bill would fix that.
We’ve had this legacy of local control that has – not intentionally – had the practical effect of making it much easier for communities to block electric generation and distribution than natural gas distribution. This necessarily means that we have made natural gas producers more politically powerful and electricity consumers less politically powerful. Whether it was an intentional choice or not, it was a choice.
There are ways consistent with energy policy and congressional law where we can rationalize and have more parity across the energy system to make sure we make the right decision every time.
I also think at the end of the day, markets win. West Virginia one hundred years ago was the place to site your energy-intensive manufacturer because they had a ton of hydro and a ton of coal. They’ve tapped out the hydro, the coal is no longer cheap, and the economy is not good anymore. Then shift to Texas which has built more wind and solar than any state in the country and unusually for a red state has been much more pro-competition in how they regulate their energy markets, that has given them more dynamic electricity costs. Those are two different red states and sets of policy choices.
A renewables project runs into trouble — and wins.
It turns out that in order to get a wind farm approved in Trump’s America, you have to treat the project like a local election. One developer working in North Dakota showed the blueprint.
Earlier this year, we chronicled the Longspur wind project, a 200-megawatt project in North Dakota that would primarily feed energy west to Minnesota. In Morton County where it would be built, local zoning officials seemed prepared to reject the project – a significant turn given the region’s history of supporting wind energy development. Based on testimony at the zoning hearing about Longspur, it was clear this was because there’s already lots of turbines spinning in Morton County and there was a danger of oversaturation that could tip one of the few friendly places for wind power against its growth. Longspur is backed by Allete, a subsidiary of Minnesota Power, and is supposed to help the utility meet its decarbonization targets.
Except by the time the zoning officials’ decision came before the full county commission, the winds were once again blowing at Longspur’s back and county officials denied the denial. Then a few weeks later, the zoning board reconsidered Longspur and opted to approve it. Now Longspur has the permits it needs from the county.
“They have the right to put the towers on their land,” Morton County commission vice chair Jackie Buckley told me. “And Longspur has crossed their Ts and dotted their Is.”
I investigated what happened here and it turns out, Allete saw what happened at the hearing and worked extremely hard to bring supporters out when the zoning officials’ decision came before the full Morton County commission. They brought with them a bevy of landowners with a future Longspur turbine sited on their property to speak, so many that it severely outnumbered the opposition. One after another, residents spoke out against the anti-wind naysayers, a phenomenon I rarely see in fights over renewable energy projects in the United States. One resident called the wind turbines “a windfall” that was ensuring their family’s “retirement plans.” Another compared it to neighbors denying a farm the right to build a barn. Multiple people said if coal mining could happen in Morton County, why couldn’t wind?
“We just tried to understand, even internally. We asked, ‘Why didn’t we have more proponents speaking?’” Todd Simmons, Allete’s vice president of generation operations, told me in an interview this week about the project’s initial rejection. He said after the initial zoning rejection, the company then went door to door asking supporters to come testify. “We tried to make sure that landowners knew that you may have to show up and be more than present. We wanted a civil meeting, and we did not want an argumentative meeting, [but] they were not coached.”
Candidly, this style of outreach reminds me a lot of door-to-door campaign canvassing and a well-worn phrase in professional politics: it all comes down to turnout. And Allete treated the situation that way, telling me that the initial rejection to them was because of an absence, not conflict. “When the folks who were anti- spoke, and the rest of the crowd did not say anything, there was a belief that silence was [an] agreement by the rest,” Simmons told me.
Buckley told me that some of these supporters were actually at the zoning hearing too, but did not want to speak up because “they wouldn’t talk against their neighbor.” Out in rural communities like Morton County, “they all know each other – it’s all one neighborhood community.” In the end, the county commission felt it couldn’t deny people’s property rights, let alone invite whatever legal ramifications would arrive from denying the project in spite of the support from these property owners. “I think it had to do more with private property rights and the people that were in favor of it have property rights, same as do the people in opposition,” Simmons said.
I think there’s an important conclusion to be drawn from what happened in Morton County for any renewable energy project developer out there dealing with local opposition. Too often I watch and listen to local permitting hearings where the dissenting voices are the only ones raised. There are obvious risks for anyone in a small community who does speak up, as I’ve heard of threats against people who come out in support of a project, from anti-renewables homeowners. But it’s clear from what happened to Longspur there is strength in numbers when supporters are mobilized to speak up.
Allete told me they saw an education in the Longspur permitting process too. “It doesn’t matter where you’re building,” SImmons said. “Working with the landowners, and the public agencies…. The sooner you can help them understand what the project is actually about, the better you are.”