DOE: ARPA-E grants attract private money
Looking to highlight the fruits of investing in energy research and development, the Department of Energy says six ARPA-E grants attracted four times more money from the private sector.
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 cars.
Correction at 9 a.m. PT: The 2009 ARPA-E grants totaled $151 million.