Researching Binational Investments in Clean Energy Startups

A student’s journey to Israel yields new perspectives on how countries can support clean technology and how project failure can stimulate future success.

While the conflict in Israel and Palestine persists, the world races to find adequate solutions to fight the climate crisis. One parallel lesson we have learned from the pandemic and the climate crisis is that one conflict does not wait for another.

In the global race against time to develop climate-tech solutions, Israel, often donned “the startup nation” and consistently ranked in the top three most innovative countries worldwide for cleantech, is a likely location of potential climate-saving technology.

It is with this knowledge that I enrolled in a Penn Law Global Research Seminar called “Israel: The High-Tech Nation,” to research how the United States and Israel’s model for jointly funding cleantech collaborations between U.S. and Israeli companies.

My research focused on the Israel-U.S. Binational Industrial Research and Development (BIRD) Energy program. The program is jointly administered by the U.S. Department of Energy, the Israel Ministry of Energy, and the Israel Innovation Authority to provide grants of up to $1 million to projects created through U.S. and Israeli partnerships. The program has funded approximately $47.5 million to over 60 cooperative projects. Projects have ranged from innovations in boosted EV charging, lithium batteries, HVAC energy efficiency technology, and self-learning climate intelligence systems for hotels.

This March, I traveled to Israel to conduct on the ground research on the program. One highlight of my trip was meeting with Nili Shalev, VP of the Israel Innovation Authority’s International Collaborations Division. This meeting was valuable to my research because, although I had spent considerable time prior to my trip researching BIRD Energy Programs, little has been written about this binational funding program.

Shalev explained that although much of the Israeli Innovation Authority’s funding for national startups comes from a bottom-up approach, meaning the agency does not seek specific types of projects, international programs such as BIRD Energy often target specific areas in which technology innovation are needed.

Shalev emphasized that the Innovation Authority knows that some companies in which the Authority invests may not succeed on their proposed projects. This fact is important given that projects in which the Authority invests only need to repay the amount of their investments if they succeed. But Shalev noted that the Authority does not see a project’s failure as a loss. Workers in companies that fail gain knowledge in the process that they can take with them to future projects, giving future energy projects a greater chance at success.

This notion of “acceptable failures” carried throughout my time in Israel, as I met with investors and entrepreneurs across a variety of sectors. While there, I met many entrepreneurs who similarly emphasized that they view the startup culture in Israel as one in which there is less of a fear of failure relative to other countries. This notion held true across entrepreneurs working across energy cybersecurity, nuclear systems, and non-energy companies.  Perhaps this best explains why Israel has had such success in emerging cleantech—and why the United States would be interested in an energy startup partnership.

Although people strongly disagree over whether Israel has a right to the land on which it sits, few can refute Israel’s status as a leader in cleantech or its ability to stimulate innovation across sectors. While the Israel-U.S. Bird Energy program continues its calls for proposals in energy solutions, climate advocates would do well to watch and learn from this rare structure of binational private and governmental clean energy collaborations.

Samuel Wong headshot

Sam Wong

J.D. Candidate, Carey Law School
Samuel Wong is a law student at the University of Pennsylvania focusing on legal solutions to the climate crisis and the energy transition. He is also the Alumni Editor on Penn Law Review and Executive Editor for The Regulatory Review.