U-M students create new how-to guides and equitable business models for green energy businesses to help Detroit entrepreneurs take advantage of new federal funding

February 24, 2023

“The Inflation Reduction Act sounds really boring,” says Michigan Ross professor Jerry Davis, “but it’s actually a big stack of money for green energy businesses. If you read through it, it’s easy to think of dozens of ways that this could benefit a city like Detroit.”

Davis and his colleague, Cat Johnson, of Michigan Ross’ Business+Impact designed a class to do just that. The class, BA670: +Impact Studio Designing Equitable Enterprises, teaches teams of grad students from all majors how to use equity-centered design thinking to develop businesses that improve communities. This year’s focus is on the green energy transition in Detroit.

The +Impact studio course is a radical departure from “business as usual.”  Equity-centered design thinking teaches students “to ask questions and put equity [and not solely profitability] at the center from the start,” explains Johnson,  “”It’s profoundly different from going through the [business ideation] process then asking, how might this impact people?” 

At the end of the course, student teams will create two final deliverables: (1) how-to guides on how Detroit business owners can make their business “greener” and take advantage of new green energy funding through the Biden Administration’s Inflation Reduction Act and (2) equitable business models related to green energy (including solar panel installation, water cisterns, heat pump installation), that entrepreneurs can take as templates and implement in the Detroit community. 

Throughout the course, students will co-create these deliverables in conversation with Detroit entrepreneurs and energy experts, addressing the most pressing energy pain points in Detroit and designing solutions that are most applicable.

Image of Ross's BA670 class: +Impact Studio Designing Equitable Enterprises, in the +Impact Studio

How the course got started

Since its inception in 2019, the +Impact studio course has focused on creating business solutions to answer the world’s most pressing problems. In its first year, students worked to scale a technology that identified lead in Flint water pipes to the rest of America. Other topics the course has addressed include: improving financial inclusion through Fintech in 2020, helping small businesses adjust to COVID in 2021, and last year, developing more equitable restaurants. 

“The fundamental premise of this course is: we’ve got good ideas and can solve problems, but how do we get them to the world? [Our answer] is that we train students in design thinking skills to translate basic research ideas into actions in the world that can improve things,” says Davis.

For all its work, the +Impact Studio course has won a fair share of awards, including the Aspen Institute “Ideas Worth Teaching Award” and a highlight in Poets & Quants. 

The Green Energy Transition: A Golden Opportunity

Following the Biden Administration’s passage of the Inflation Reduction Act, entrepreneurs have more funding than ever to start green energy businesses or electrify their existing business. “With the Inflation Reduction Act, every homeowner can get free cash to get rid of their AC and use a heat pump or get rid of their gas stove and install an electric oven. There’s a lot of money available for homeowners and business owners to green and electrify their business,” Davis says. 

For budding entrepreneurs thinking of starting a business, thermal energy and solar panel installation businesses aren’t often the first thing to come to mind. But Jerry Davis believes the Inflation Reduction Act could change that, encouraging new B2B green energy ventures that not only take advantage of these new funding opportunities but also make the communities around them more sustainable. “This is an incredible opportunity for creating new businesses, particularly in Detroit,” Davis says. 

Making green energy resources available to Detroit entrepreneurs

While in previous years, the +Impact Studio course publicized its free how-to guides and business models online for entrepreneurs to use, this year, they’re taking it a step further. This is the first year the course has specifically focused on creating business solutions for one location. Speaking on the partnership with Detroit, Davis says, “Detroit really has a lot of talents and a great ecosystem and raw materials that the Inflation Reduction Act and the funding available now could help capitalize.”

To make sure their business solutions are targeted toward Detroit small business needs, community engagement will take a center role in the course like never before. Six weeks into the course, students have already interviewed Detroit entrepreneurs to gain insight into the current energy needs and pain points in Detroit and have started the business model prototyping process. Throughout this time, students will also work closely with a panel of advisors (Detroit and energy experts) to refine their business prototypes.

Image of Ross's BA670 class: +Impact Studio Designing Equitable Enterprises, in the +Impact Studio

At the end of the course, Davis hopes that prospective entrepreneurs in Detroit can take the business model templates they’ve made and implement them in Detroit, perhaps through Business+Impact’s long-standing partnership with the Ford School of Public Policy’s Detroit Neighborhood Entrepreneurs Project. Long term, Davis and Johnson hope to work with Detroit community partners to host entrepreneurial training programs, classes, and funding opportunities to train interested entrepreneurs to launch real businesses with these models. 

Detroit entrepreneurs will be able to access the new green energy resources at: https://www.greenbiztransition.com/. How to guides will be posted in late March 2023 and business models in June 2023. 

This article was written by Allison Wei (Ross '25).