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| Photo credit: Mainstream Engineering |
Internet giant Google is the poster child for demonstrating that revolutionary technologies can be developed by a small number of people on a limited budget. The company, whose name is now a household word and whose net profits exceeded $6 billion last year, was incorporated in a garage by Stanford Ph.D. students who were doing a dissertation on search engine development.
In the world of clean energy, no one knows yet which companies will be the equivalents of Google, creating the technological breakthroughs that will change the course of U.S. energy history. But the Department of Energy is trying to ensure that at least some companies get a leg up in their efforts to win that coveted title. In November 2009, the DOE awarded 125 grants of up to $150,000 each to more than 100 small businesses that are working to develop new technologies to decrease carbon pollution and increase energy efficiency. “Small businesses are drivers of innovation and are crucial to the development of a competitive clean energy U.S. economy,” said U.S. Energy Secretary Steven Chu in the DOE’s announcement of the awards.
The funding for the awards, which totaled more than $18 million, was made available through the American Recovery and Reinvestment Act (ARRA). The ARRA funding augmented two existing programs called Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) through which federal agencies with large research and development budgets, like the Departments of Energy and Defense and the National Institutes of Health, set aside a small fraction of their funding to go toward competitive grants for small businesses.
SBIR was developed after a 1982 study found that small businesses have 2.5 times as many innovations per employee as large businesses but receive less government assistance than large businesses do. STTR is similar to SBIR, but it requires its small business grantees to work in collaboration with a non-profit research institution. Small businesses that win SBIR or STTR awards keep the rights to any technology they develop and are encouraged to commercialize the technology.
Mainstream Engineering Corporation of Rockledge, Florida won several of the ARRA-funded SBIR-STTR awards. The company is a research, development and manufacturing business that specializes in advanced thermal control and energy conversion systems. It has approximately 100 employees, 40 of whom are engineers and scientists.
“Mainstream is very active in applied energy research, working on projects to convert garbage to fuel, developing low-emissions hybrid vehicle drive systems, developing improved battery and fuel cell technologies, developing more efficient cooling technologies, developing methods to reduce emissions, developing new lightweight materials, and exploring methods to extract power from the environment,” said Robert P. Scaringe, Mainstream’s founder.
The ARRA-funded SBIR-STTR awards went to small businesses developing new technologies in such areas as improving the efficiency of air conditioning and refrigeration systems; decreasing the amount of water used in electric power production; developing smart controllers for household appliances to enable smart grid services; achieving significant cost and performance improvements in solar technologies; and improving efficiency and environmental performance in the cement industry. Grantees that produce successful results with potential to meet market needs will be eligible for a second round of SBIR-STTR grants in the summer of 2010.
For example, Encryptor, Inc. of Plano, Texas received nearly $150,000 to develop a semiconductor chip that when embedded inside electrical consumer appliances will automatically reduce those appliances’ power consumption during times of peak electrical demand. Compact Membrane Systems, Inc. of Newport, Delaware received four $150,000 awards for various projects to reduce energy usage and greenhouse gas emissions from energy-intensive manufacturing processes. According to the DOE, the projects with the greatest near-term commercialization potential as well as job creation potential were the ones that won the awards.
Pittsburgh, Pennsylvania’s Plextronics Inc. received a grant of $150,000 to develop high-performing, low-cost solar cells based on organic photovoltaic technology. It will use the grant funds to collaborate with another small business, Solarmer Energy Inc. of Los Angeles, California, that shares with Plextronics an expertise in organic materials that can be used to convert light into electricity. Together these companies will take the first step toward the commercialization of a material that could provide an alternative to silicon-based solar panels.
“Research and development is absolutely critical for the future of the U.S. clean energy economy,” said Lori Lecker, director of global marketing for Plextronics. “The clean energy economy is, in many ways, about reinventing how we think about, create and deliver energy. You simply cannot do that without the research and development that is taking place in this country at small companies, like Plextronics, right up to Fortune 500 businesses.”
Mainstream Engineering Corporation’s awards were for four projects: an active thermal energy storage system; a wireless remote monitoring system that detects problems in residential air conditioning systems; a manufacturing improvement to reduce energy loss and greenhouse gas emissions during cement manufacturing; and a distributed power system that increases efficiency, reduces pollutant emissions, and uses an environmentally sustainable fluid. Mainstream’s Scaringe explains that a $150,000 SBIR-STTR award typically covers an engineer’s salary for the duration of a six-month project. Mainstream has hired more than a dozen engineers in the last year and currently has about a dozen more engineering job openings.
Scaringe believes small businesses will play a key role in developing the clean, cost-competitive and stable energy sources of the future. “Smaller firms have many advantages as sources of innovation because they are quick to adopt new and high-risk initiatives; they facilitate structures that value ideas and originality; and they have a better capacity to reap substantial rewards from market share in small niche markets,” Scaringe said.
Dan Kammen, a University of California, Berkeley professor and energy expert, travels the country doing public speaking engagements about the importance of clean energy research and development. According to Kammen, neither small businesses nor large businesses in the U.S.—nor the federal government—are investing in clean energy research and development at levels comparable to what’s occurring in Europe or Japan. The U.S. energy sector also invests far less in research and development relative to other sectors of the economy. “Biotech invests 10 or more percent of all revenues back into R&D. The energy field has reinvested a tiny fraction of revenues, under 0.4 percent, back into R&D,” Kammen said in an October 2008 interview on PBS’s Frontline.
Kammen says that one of the main reasons for the underinvestment in the energy sector is the lack of a coherent federal climate change and clean energy policy that would send a strong signal to energy companies that the U.S. economy is set to embrace cleaner technologies.
Until such a policy is adopted, programs such as the SBIR and STTR awards and other clean energy research and development efforts that were funded by ARRA—such as the DOE’s new Advanced Research Projects Agency – Energy (ARPA-E)—will do their best to spur the development of the new technologies needed to solve the pressing energy challenges of our times.
ARPA-E’s newly appointed director, Arun Majumdar, believes they can. As he explains on the agency’s website, “With the best R&D infrastructure in the world, a thriving innovation ecosystem in business and entrepreneurship, and a generation of youth that is willing to engage with fearless intensity, we have all the ingredients necessary for future success.”
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