The rapid advancements in climate technologies offer numerous benefits and generate much excitement. However, while it’s easy to get caught up in these innovations, it’s important to maintain a balance between investing in cutting-edge solutions and avoiding being stuck with older, costly technologies.
For example, the cost of Battery Energy Storage Systems (BESS) has significantly declined over the past few years, even as the technology has continued to improve.
Source: NREL
How Corporate IT Buyers Avoid Technology Obsolescence: Key Lessons
Corporate IT buyers are accustomed to the continuous introduction of new technologies, which requires them to stay updated on the latest developments and invest wisely. They must balance the need to adopt advancements with the risk of overinvesting in technologies that may soon be surpassed.
To navigate these technology cycles, IT purchasers often adopt a staggered investment approach. This strategy helps them avoid being locked into outdated systems, allowing for greater flexibility to adapt to market changes and seize new opportunities.
Additionally, since technologies typically become more powerful and affordable over time, a staggered approach enables IT buyers to determine when upgrades are truly needed, ensuring a favorable return on investment.
Applying IT Buyer Strategies to Climate Technology Purchases
In addition to the traditional strategies deployed by IT buyers, climate technology investments need to consider the impact of incentives—such as rebates, tax credits, and accelerated depreciation—which can significantly tip the scales in favor of the buyer.
Unlike typical business technology purchases, climate technology investments are often bolstered by various federal, state, and local incentives. These incentives can shorten payback periods and enhance the project's Internal Rate of Return (IRR).