Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Politics

Trump’s IRA Pause Is Already Leading to Layoffs

The founder of Zero Emissions Northwest talks about furloughing his staff — and about the farmers he serves, who are also paying a price.

Donald Trump.
Heatmap Illustration/Getty Images

As President Donald Trump has thrown funding for a broad swath of energy-related federal programs into disarray, Heatmap has been tracking the tangible impacts. On Friday I got the chance to talk with David Funk, founder and president of Zero Emissions Northwest, who had to furlough his three employees this week after Trump’s executive order “Unleashing American Energy” paused the disbursement of funds from the Inflation Reduction Act and the Bipartisan Infrastructure Law for up to 90 days.

ZEN’s staff — and the rural Pacific northwest farmers and small business owners that it serves — rely on grants from the Department of Agriculture’s Rural Energy for America Program. As Funk explained in a LinkedIn post on Thursday, the organization has secured 67 grants in its 15 months of operation, each one representing a specific renewable energy- or energy efficiency-related project for a rural customer — think solar installations, heat pumps, better refrigeration, or even agricultural spray drones. But Funk told me that the majority of these projects have yet to be completed, and now their future is in question.

“I do think that we are a canary in a coal mine right now, and we are a leading indicator of impacts that are going to be much larger than what we’re seeing with our program and our company,” Funk told me.

I asked Funk about the work ZEN does, the confusion around learning that its funding was affected, and how he and the customers he serves have responded. Our conversation has been edited for length and clarity.

Get the best of Heatmap in your inbox daily.

* indicates required
  • What led you to start Zero Emissions Northwest?

    I’ve been in energy for coming up on two decades, so I’ve got experience in the space. Then the second thing that happened was I married a farmer’s daughter outside of Spokane — so a 10,000-acre wheat farm — and that got me a lot closer to agriculture than I had ever been. And the last thing, about four years ago, I looked at my father in law’s shop and said, there’s got to be a grant for a farmer to put solar on their shop. I found the Rural Energy for America Program, wrote him a grant, successfully won it, and then about six of his neighbors came by and said, “Hey, how’d you get him money? I want money to go and improve my farm.” So then I was the most experienced person in eastern Washington. And the USDA launched a contract called the Technical Assistance contract, which we won in Idaho and Washington. And that's when I quit my job and started ZEN.

    In rough numbers, our projects have won about $4 million worth of grant support, and that $4 million worth of grant support is matched by private capital. And then those projects are going to save $20 million over their useful life. So call it $30 million of total investment in rural communities, because the money saved on these farms doesn’t go to anything other than fertilizer for next year’s crop, and seed, wheat, and maintenance and mechanics. All of this gets reinvested in making that farm better or making that business better.

    How did you learn that ZEN would be impacted by Trump’s executive order?

    We talked to people in the government, and they have repeatedly told us that obligated grants have never been removed. So we were operating on the understanding that once a project is obligated, we can then start working and helping that farmer execute on that project. So Trump takes office, we’re still heads down doing what we’re doing — and we do have this belief that the work that we’re doing is exactly the work that Trump wants to see.

    We get paid roughly about four times a year, so basically a quarterly invoice. So we haven’t been paid since October. We submitted an invoice in early January for our normal operating procedures, and the USDA processed that in the first week of the Trump administration, and said, “Cool. They’ve done everything, press pay,” and it didn’t go through. We were told verbally that there were back-end restrictions.

    We thought it was all tied to this OMB thing. On Tuesday night, [the OMB memo] was blocked, and then on Wednesday, it was rescinded. And all of that’s happening in real time with everybody in the country — not just us citizens, but employees as well. Bureaucrats going, we’re learning about this by tweet, too! And then on Wednesday, we learned in real time with our partners that [the pause in funding] was actually from an executive order, not from the OMB memo. We made the decision that day to furlough our employees. If this goes for 90 days, it’ll be six months of us not getting paid on our largest source of revenue.

    Have the farmers and small businesses that you work with had to halt their in-process projects?

    It varies for each project. We have a handful of solar projects that are up, and we’re just waiting on a utility interconnection. So those projects we’re finishing. We’ve got equipment like new washing machines en route to a rural laundromat. That’s going to still happen, because he’s already bought them, but his second invoice is going to become due when those show up on site. So he doesn’t really know what’s going on and how to pause that. But if you haven’t started on your project, we’re advising people to not take on more risk by spending money and [instead] just pausing [their projects].

    I know it’s only been a few days, but what efforts have you made thus far to get in touch with the federal government?

    I’ve got a long list of people that we’re trying to get in touch with. I’ve told all of our customers — many of whom are in the GOP in eastern Washington and northern Idaho — to call their representatives, as well as if they have Twitter, tweet at Donald Trump. So we’re trying to empower our customers to really advocate for their projects, and that’s our main focus.

    I’m sure a majority of our customers voted for Donald Trump and voted for the GOP representatives, and we just want them to really explain how this is damaging their business and their farm.

    Given that many of your customers support President Trump, what has their reaction to this funding freeze been like?

    Everybody expected that funding would continue. That was the message that we were getting from the USDA — the obligated funds have been obligated, the government has signed a contract. So everybody was surprised about that. But I’ll be honest, their reactions are mixed. Some farmers are furious. They have spent this money. They have taken on a risk. They did so with the expectation that the government would honor their contract. So that’s one category. We have another category of farmer that kind of lumps this into weather — things they can’t control. There’s much more understanding if you did vote for Donald Trump. We have had a farmer say, “Maybe they’ll find some waste and it’ll filter through, and we’ll eventually get paid. We can’t control that, but this might be a good thing for our country.” To which I replied, I want the filter first, not second!

    But nobody thinks that their project doesn’t fit this mold of unleashing American energy. Nobody is really doubting that they might eventually get paid, because this is aligned with what everybody wants. We’re helping farmers take control of their costs, generate onsite power, or conserve energy through upgrades that really benefit their bottom line and really improve their own farm. We’re helping them reinvest in themselves through the process. We prioritize Made in America equipment wherever possible. We want to see these tax dollars and these incentives stay in the country. So we’ve actually never had a farmer choose to go with a non-Made in America solar system.

    Even if this funding pause ends soon, how do you think about the future of your organization given President Trump’s apparent antipathy toward renewable energy and energy efficiency projects — or at least language that highlights any sustainability-related benefits?

    If we’re going to go and apply for more contracts to the USDA, one of my big concerns right now is if we’re talking about [renewable energy and energy efficiency], are we going to get blacklisted from doing the work that we do in rural Washington? We have always been, with our customer base, really focused on finance, cost savings, practicality — and then all of the decarbonization benefits of this stuff is very secondary for all of our projects.

    When I named the company, all of those things were also in question, right? I called a farmer and said, “Hi, it’s David Funk from Zero Emissions Northwest.” And they said, “What? You don’t fart?” And he hung up on me. We think about, how are we being viewed by our customers? And with the politicalization of language, are we losing out on a market segment that we could be helping, just because somebody looks at our name and says, well, I’m not gonna work with them? It’s an active discussion always, how we present ourselves on paper.

    You’re out of free articles.

    Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
    To continue reading
    Create a free account or sign in to unlock more free articles.
    or
    Please enter an email address
    By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
    Politics

    The Unsung Hero of the Clean Energy Economy Is Now on the Chopping Block

    Tax credit transferability is a wonky concept, but it’s been a superpower for clean energy developers.

    Cutting transferability.
    Heatmap Illustration/Getty Images

    One of the most powerful innovations in the Inflation Reduction Act was a new vehicle to finance clean energy projects. In addition to expanding the nation’s tax credits for climate-friendly projects, Congress gave developers freedom to sell these credits for cash. If a battery factory couldn’t take full advantage of the tax credits itself, it could transfer them to someone else who could.

    Now, Republicans on the House Ways and Means Committee have proposed getting rid of this “transferability” provision as part of a larger overhaul of the tax credits. A draft bill published on Monday would end the practice starting in 2028.

    Keep reading...Show less
    Climate

    AM Briefing: Saudi Arabia Deal Includes New Aramco Investments in U.S.

    On Trump’s Gulf trip, budget negotiations, and a uranium mine

    Saudi Arabia Deal Includes New Aramco Investments in U.S.
    Heatmap Illustration/Getty Images

    Current conditions: Highs in Dallas, San Antonio, and Austin could break 100 degrees Fahrenheit on Wednesday afternoon, with ERCOT anticipating demand could approach August 2023’s all-time high of 85,500 megawattsGovernor Tim Walz has called in the National Guard to respond to three fires in northern Minnesota that have burned 20,000 acres and are still 0% containedThe coldest place in the world right now is the South Pole of Antarctica, which could drop to -70 degrees tomorrow.

    THE TOP FIVE

    1. Trump’s visit to Saudi Arabia results in investment deals with Aramco

    Win McNamee/Getty Images

    Keep reading...Show less
    Yellow
    Energy

    Why Undoing the IRA Could Set Up a Gas-Fueled Power Price Shock

    Tuesday’s encouraging inflation data concealed an ominous warning sign.

    Power lines.
    Heatmap Illustration/Getty Images

    The Trump administration’s policy of increased natural gas exports abroad, plus increased industrial and artificial intelligence investment at home, plus cuts to green energy tax credits could add up to more energy price volatility for Americans.

    On Monday, the House Ways and Means Committee unveiled its plan for deep cuts to the Inflation Reduction Act, including early expiration dates and restrictions on the core clean energy tax credits that would effectively gut America’s signature climate law.

    Keep reading...Show less