The Department of Energy today released a financial report card on its ARPA-E research program, saying that grants for clean-energy technology development led to larger investments from the private sector.
Six early-stage energy technology companies received $23.6 million in grants, sized from $750,000 to $8 million each. One year later, those companies attracted a total of $100 million from outside investors.
"This amount of private capital support indicates that the business community is hungry to invest in truly innovative solutions to the country's energy challenges," Energy Secretary Steven Chu said in a statement.
The six companies the DOE chose to single out, which work in solar, wind, and battery storage, represent just a portion of the grants that ARPA-E has awarded. According to a report prepared for Congress (click for PDF), the $151 million in ARPA-E awards in 2009 brought in $57 million from the private sector at the time of the grants. Within two months, those companies attracted an additional $33 million from the private sector.
The Obama administration is eager to highlight positive results from the ARPA-E program and from investments in clean-energy research and technology. During the State of the Union address last month, President Obama called for reining in subsidies for oil companies to pay for government-funded research in clean energy technologies to spur economic growth and exports.
Obama today also announced a program to spur investment in commercial building efficiency through tax incentives and government financing.
The ARPA-E program has attracted the attention of many scientists and entrepreneurs and has become a favorite of Secretary Chu. Its mandate is to finance high-risk ventures with a big potential pay-off that are navigating the transition from basic science to commercialization.
ARPA-E was created in 2007 but not funded until 2009 with the passage of the stimulus plan. Now, the DOE hopes to double its budget from its initial rate of $400 million over two years, although it faces significant challenges advancing its energy agenda with the current Congress.
Venture capitalists continue to funnel money into green-technology companies. But because of the high cost and difficulty of scaling energy technologies, government funding has become an important part of start-ups' financing strategy.
Here are the companies that the DOE chose to highlight:
- 1366 Technologies, which is developing a process to cut the cost of manufacturing silicon solar cells. The MIT spin-off received a $4 million grant that accelerated its development and helped attract an additional $33.4 million.
- Envia Systems with Argonne National Laboratory is making lithium-ion batteries with better energy density that will allow for longer electric vehicle driving range. General Motors intends to use the technology in future versions of its electric
- FloDesign Wind Turbine is making a wind turbine that uses a design similar to a jet engine's. Because they are smaller, the turbines, which concentrate the wind to boost power output, could be used in conjunction with traditional windmills in wind farms, according to the company.
- SunCatalytix is designing a low-cost catalyst for an electrolyzer for making hydrogen from water. The company's vision is for buildings to use solar panels to run a hydrogen fuel cell, which would then power a home.
- General Compression is developing an air compressor that would be attached to a wind turbine to store energy. The compressed air would be stored in underground caverns and released to generate electricity, allowing turbines to supply the grid when needed.
- 24M, another MIT spin-off, is designing a lithium-ion battery with higher energy density than existing batteries. It was founded by the same MIT professor who started battery maker A123 Systems.
Correction at 9 a.m. PT: The 2009 ARPA-E grants totaled $151 million.