The market of government financing for renewable energy technologies holds both great potential and significant risk to companies looking to advance their business development goals. On the one hand, working with the government can provide non-dilutive capital for innovative technologies and/or research and development (R&D) activities. Winning and successfully executing on government contracts can generate prestige and validation for companies and signal to investors on the strengths of innovative technologies. On the other hand, government programs often come with complicated application requirements and long runways for returns on investments. There is often the need to comply with significant government oversight and reporting obligations. Some government programs can be highly competitive with IP considerations and government use rights that may dissuade potential applicants. Nevertheless, it is possible for renewable energy companies with realistic budget constraints to pursue these opportunities effectively and efficiently.

Identify Energy Funding Opportunities

The first step to effectively and efficiently pursuing government financing of clean technologies is identifying potential opportunities. Most publically available grants can be found in aggregators like Grants.gov and FedBizOpps.gov although sometimes the titles for these postings can be misleading or difficult to understand. In addition to these aggregators, it is also possible to search for opportunities by identifying specific technology subprograms like those for wind, solar, and bioenergy in the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) and checking their individual solicitation announcement pages. There are also opportunities at the state level, such as the California Energy Commission’s (CEC) grant program, that can often be leveraged in coordination with federal funds (sometimes specifically to meet cost share requirements).

Evaluate Your Eligibility

The second step entails evaluating opportunities of interest. Companies should undertake a process of due diligence to evaluate their eligibility for the program. Some questions to consider include:

  • Is there a small business preference or carve out? What are the applicable thresholds? 
  • What entities can apply? Universities? National DOE laboratories? Industry? Local and state governments? 
  • Are there restrictions on venture funding, especially being majority venture funded? 
  • Is a cost share required? What are the allowable direct and indirect costs? 
  • Is partnering preferred or necessary to fully respond to the solicitation? 
  • What other supporting documentation may be required including project narratives, budget justifications, legal assurances, permitting/licensing requirements, and independent third party validation?

While some solicitations can be lengthy to read, tease apart, and digest, some upfront due diligence can prevent significant headaches and wasted time and resources later on.

Effectively Position Your Technology

The third step marks drafting the actual proposal. In addition to fulfilling each submission requirement outlined the in solicitation (note, checklists are often provided), competitive proposals will: 

  • Align with agency objectives and metrics
  • Consider team structure and research prior program winners
  • Provide adequate lab, pilot, or demonstration test data
  • Be creative on how elements of your technology could benefit unobvious sources

Also, many companies will derive value from having met with program offices prior to the release of solicitations, after which gaining insight directly from program managers becomes much more difficult. While it is not absolutely necessary to have meetings in advance of applying for funding opportunities, such meetings often help companies most effectively position proposals. Such meetings could potentially be a first step to entering this market. Lastly, it is crucial to leave adequate time for final revisions prior to meeting the submission deadline.

Beware of Common Proposal Mistakes

The fourth and final step involves checking for common proposals mistakes. Common proposal mistakes include:

  • Noncompliance – Over 50% of applications are thrown out for non-compliance with program or application requirements
  • No Connection to Agency Priorities – That is, focusing entirely on the technology with a failure to align with the political and strategic objectives underlying the program
  • Fierce Competition – Tough investment environments lead to increased competition for government money
  • Indefinite – Not providing concrete work plans or expected outcomes
  • Unconnected – What difference does the technology make to the current industry?

While there are never any guarantees in pursuing government financing opportunities, following these four steps will dramatically improve a company’s prospects of effectively and efficiently leveraging this market.