November 10, 2016
Posted by Beth Hartman, Electric Power Research Institute
The journey that clean energy entrepreneurs undertake is long and challenging, but with support from resources around the country including universities, labs, and incubators, the path to success can become clearer. Our third Incubatenergy Network whitepaper highlights how stronger national coordination of these resources can help more effectively support clean energy entrepreneurs across all stages of the journey, from research and development to commercialization and deployment.
While individual clean energy innovation pathways are varied, this white paper identifies common touchstones toward commercialization: Successful entrepreneurs often receive research support from universities and laboratories, development support from incubators and accelerators, and deployment support through funding sources and corporate partnerships.
Support networks are in place in many areas around the United States to help guide entrepreneurs along their paths to success. Clean energy incubators often serve as hubs for strong regional innovation ecosystems encompassing diverse roles and participants. The U.S. Department of Energy (DOE), National Renewable Energy Laboratory (NREL), Electric Power Research Institute (EPRI), and other organizations foster and support innovation across the country. Connections made through the Incubatenergy Network are helping these groups strengthen interregional collaboration and better coordinate national resources for the benefit of the entrepreneurial community.
Across the country, there are many resources for entrepreneurs engaged in exploratory research and proof-of-concept testing focusing on clean energy technologies, services, and business strategies. DOE’s Small Business Vouchers (SBV) Pilot is one example of how emerging businesses can access the expertise and unique capabilities at the national labs, free of charge. This new program provides vouchers up to $300,000 for eligible businesses and startups to “spend” in speeding development of clean energy technologies through access to lab facilities and researchers. The first two SBV rounds support 76 companies with voucher awards totaling about $15 million.
Increasingly, universities and national labs are fostering innovation within the communities they bring together and serve. Most leading U.S. clean energy incubators are hosted by or have strong connections with universities. DOE’s Cleantech University Prize (UP) program has identified eight leading regional universities and supporting organizations that help earlier-stage clean energy companies led by students to further develop their technology, business strategy, and more.
As innovations transition into the development phase, there are several models for providing incubation support to clean energy entrepreneurs. Figure 4 in the report identifies some of the participants in the Incubatenergy Network that support tech transfer after proof of concept is achieved. These groups provide validation testing and other technical and business services falling into four main categories: lab + incubation, physical incubators, challenges, and pilot project demonstrations.
The transition from development to deployment is not sharp, fast, or easy for clean energy innovations, creating the need for extensive tech transfer support during pilot demonstration and then scale-up. Fundraising is critical, with a variety of different sources spanning government programs and foundations and including angel investors, VC, and project finance. A recent MIT Energy Initiative report examined why the VC model has not worked well in the clean energy industry, where scaling innovations and displacing existing technologies takes time, can be expensive, and offers an unfavorable risk-reward profile for many traditional sources of capital.
Recent announcements of increased long-term funding by governments and global philanthropy and technology leaders are targeted at fostering, accelerating, scaling, and quickly deploying clean energy solutions. Prominent examples include Mission Innovation, which engages the United States, China, and many other countries, and the Breakthrough Energy Coalition, co-chaired by Bill Gates. Strong and sustained policy commitments and pricing signals also are essential for fostering market transformation, increasing competitiveness, and further reducing cost barriers to deployment of clean energy innovations.
Successful clean energy entrepreneurs follow many different paths and, often, an iterative process as their innovative solutions journey through the research, development, and deployment phases. Typically, tech transfer support is provided by diverse organizations—starting with universities and labs, then on to incubators, accelerators, public-private funding sources, corporate partnerships, and others.
Since its launch in early 2015, the Incubatenergy Network has demonstrated that bringing together leading incubators, building on support networks existing around the country, and expanding collaboration among regional and national stakeholders can help strengthen the U.S. clean energy innovation ecosystem. Partnering with incubators and support networks around the world—and creating opportunities for U.S. entrepreneurs to access these resources—promises similar benefits.