CEBN is pleased to highlight Innovation at Scale: Supporting Pilot-Scale Demonstrations, a new report by Natalie Tham at the Bipartisan Policy Center.

INTRODUCTION

The establishment of the Office of Clean Energy Demonstrations (OCED) at the Department of Energy represents an important step towards accelerating American innovation and achieving net-zero greenhouse gas emissions by 2050. This report identifies a gap in public funding for pilot-scale demonstration projects requiring less than $25 million and offers recommendations aimed at helping OCED support these projects by creating a Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program through existing authority. The recommendations in this report were developed in consultation with clean energy startups, incubators and accelerators, investors, NGOs, think tanks, researchers, and BPC’s American Energy Innovators Network (AEIN). This report builds upon lessons learned from the longstanding DOE SBIR/STTR program and draws from the success of the Advanced Research Projects Agency–Energy (ARPA–E) SCALEUP program.

RECOMMENDATIONS

Eight key recommendations are discussed in this report:

1. Make funding available for flexible purposes. Awardees will be better supported if they have flexibility in how they spend their awards. Some options include permitting costs, patent applications, purchasing equipment, securing office and other workspaces, working with engineering and design partners, supporting manufacturing at scale, creating industry engagement, finding corporate partners, and identifying customers.
2. Consider raising the cap for awards. A higher awards cap could better meet the needs of OCED SBIR/STTR projects, which are further down the commercialization pathway than projects supported by the existing DOE SBIR/STTR program and are likely more capital intensive.
3. Operate independently of the larger DOE SBIR/STTR program. The OCED SBIR/STTR program should focus on helping startups fund pilot-scale demonstration projects, a focus unlike SBIR/STTR programs in other DOE applied offices, which focus primarily on earlier-stage R&D projects. In order to adopt this approach, OCED SBIR/STTR should follow the model of ARPA-E by managing its own SBIR process separate from the rest of DOE’s SBIR program.
4. Offer open topic solicitations, as well as solicitations for specified topics where applicable. The current DOE SBIR/STTR program has been criticized for soliciting applications in narrowly defined technology-oriented topic areas to meet specific federal R&D needs. This approach disqualifies entrepreneurs whose innovations may be highly relevant to DOE’s and OCED’s mission, but whose ideas fall outside the scope of certain restrictive topics.
5. Consider a flexible structure to simplify contracting for eligible awardees. This would allow eligible companies to access Phase II financial resources with lower administrative burden, once milestones or requirements are met, and would eliminate the need for separate applications for companies that are further along commercially.
6. Increase the frequency of application windows. OCED SBIR/STTR applications should be reviewed more frequently than twice per year to allow entrepreneurs to apply for funding at the most optimal time in their company growth timeline and before they fall prey to the valley of death.
7. Bolster support for first-time and underrepresented applicants. OCED could utilize a variety of approaches to achieve this goal, which may include strategic outreach, building out a Phase 0 program, developing support materials, and/or providing access to feedback and individual support.
8. Consider high-growth, innovative startups as well as larger, more established small businesses. OCED should consider a more robust definition that includes both the current employee cap, as well as other indicators that demonstrate an applicant to be an innovative and high growth startup. This will help ensure that the program focuses on startups.

DOWNLOAD THE REPORT

OCED has a vital role to play in accelerating important decarbonization technologies, particularly at the pilot demonstration phase. The full report outlines each recommendation in greater detail.

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Guest blog post authored by Natalie Tham.

Content originally published here and has been edited slightly by CEBN with permission.