New businesses and technologies go through a number of stages before they reach full commercialization. There are a wide range of resources to help businesses move along the path toward commercialization; one tool to help describe this path is a scale of Technology Readiness Levels (TRL). A chart showing potential funding organizations by TRL is below, with links to potential funding organizations in the following sections.
The kinds of resources that are appropriate for your business depend on the TRL of the technology. (Companies often have multiple technologies at different points along the TRL scale.) HREDV targets technologies in TRL 5-7 in its co-investment program. In order to find the right financing and growth opportunities for your business, you need to be able to match your business’s goals and capabilities to the mission of the funding organization. See below to explore resources for possible funding opportunities by TRL.
Technology readiness levels 1 and 2 correspond to basic and applied technology research. Basic science and engineering research and paper studies would usually fall into this category. DOE defines TRL 1 as Basic principles observed and reported and TRL 2 as Technology concept and/or application formulated. Examples are a resource assessment for wind on Maui, and paper studies on basic properties of a technology or its feasibility. A variety of programs are available to help Hawaii clean tech businesses who are at TRL 1 and 2:
- Small businesses and research organizations/business partnerships: The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide R&D funding for high-tech research ideas, beginning with feasibility studies (Phase 1) and leading into technology development (Phase 2) and ultimately commercialization (Phase 3). SBIR and STTR funding is available from 11 different federal agencies, each with different missions, solicitation timelines, selection criteria, and award amounts. High Technology Development Corporation hosted a workshop in November 2009 that brought a number of SBIR federal program managers to the state to make presentations regrading their agencies’ areas of interest and funding opportunities. While multiple agencies are interested in clean energy technology development, DOE’s SBIR and STTR program may be a good place to start.
- Bioenergy and crop-related research: College of Tropical Agriculture and Human Resources (CTAHR) and the Pacific Basin Agricultural Research Center (PBARC).
- Microloans for ideas spinning out of the University of Hawaii: Hoku Scientific Microloan Program offers low-interest loans of up to $5,000 to UH entrepreneurs.
- Tech businesses in need of office space: The state-funded High Technology Development Corporation operates facilities specifically for technology entrepreneurs on Oahu (Manoa Innovation Center) and Maui (Maui Research & Technology Park in Kihei). The Shidler Hatchery at the Pacific Asian Center for Entrepreneurship and E-business provides office space to help UH student entrepreneurs get started.
- Other clean energy technologies: Hawaii Natural Energy Institute partners with a range of organizations to further technology research.
Active R&D is initiated in Technology Readiness Level 3. TRL 3 encompasses research to prove feasibility, and TRL 4 gets into early technology development. DOE defines TRL 3 as Analytical and experimental critical function / characteristic proof of concept. TRL 4 is Component and/or breadboard validation in laboratory environment. Examples are small scale crop trials of potential tropical bioenergy crops, and laboratory testing of components for a high-efficiency photovoltaic cell. Around TRL 4, projects move from science to engineering, with early investigation into how the components might work together as a system.
- Small businesses and research organizations with SBIR/STTR Phase 1 funding: Businesses that received SBIR and STTR funds are eligible to apply for Phase 2 funding to support early technology development.
- For technology that originates in UH: The UPSIDE program, run by the state-funded Hawaii Strategic Development Corporation, helps support technology research and proof of concept.
- For ocean-related science and technology development: The National Defense Center of Excellence for Research in Ocean Sciences (CEROS) issues an annual solicitation, usually in the fall, for ocean-related technologies of interest to DARPA and Department of Defense needs. CEROS funds technologies ranging from TRL 2 to TRL 6.
- For technologies with commercial applications and relevance to the Navy: Hawaii Technology Development Venture (HTDV), a project of PICHTR, issues an annual solicitation for technologies of interest to the Office of Naval Research with dual-use (military-civilian) applications.
- For energy businesses and research organizations: Advanced Research Projects Agency – Energy (ARPA-E), funds projects that will develop transformational technologies that reduce America’s dependence on foreign energy imports; reduce U.S. energy related emissions (including greenhouse gasses); improve energy efficiency across all sectors of the U.S. economy and ensure that the U.S. maintains its leadership in developing and deploying advanced energy technologies.
Technology readiness levels 5 and 6 are technology demonstration. According to DOE, TRL 5 requires Laboratory scale, similar system validation in a relevant environment and TRL 6 means Engineering/pilot-scale, similar (prototypical) system validation in relevant environment. Examples are a pilot scale technology that produces ethanol from a cellulosic feedstock, and a prototype of a small wind turbine that is being tested in a variety of controlled, simulated environments.
- For clean energy companies with projects located in Hawaii: HREDV is targeting this area with its range of activities, including a co-investment program available for companies nearing the commercialization of a technology. HREDV has funded 10 companies through a competitive solicitation process; issuing RFPs in 2009 and 2010.
- For advanced transportation technologies: the Hawaii Center for Advanced Transportation Technologies (HCATT) hosts public-private partnerships aimed to advance fuel cell and electric drive technologies.
Technology readiness levels 7 and 8 represent the system commissioning part of the technology development cycle. According to DOE, TRL 7 requires Full-scale, similar system demonstrated in a relevant environment and TRL 8 means Actual system completed and qualified through test and demonstration. Examples are a new electric car technology operating on the road in a wide variety of actual driving conditions, or the installation and testing of a new window technology in an occupied office building.
- For clean energy companies with projects located in Hawaii: HREDV is targeting this area with its range of activities, including a con-investment program available for companies nearing the commercialization of a technology. HREDV has funded 10 companies through a competitive solicitation process; issuing RFPs in 2009 and 2010.
- For clean energy and other technology start-ups: Hawaii Strategic Development Corporation is a state-funded agency that partners with groups such as the Hawaii Angels and a number of venture funds to invest in Hawaii-based companies.
- For energy efficiency technologies on Oahu, Maui, and Hawaii Island: The Public Benefits Fee Administrator – Hawaii Energy Efficiency and Conservation Program, run by SAIC – tests and validates efficiency technologies that help end users save energy. Technologies that meet the program’s performance standards and cost criteria may ultimately qualify for a rebate under the program. (Kauai’s energy efficiency are operated by the Kauai Island Utility Cooperative, and may also have opportunities for new technologies.)
- For any energy project: Advanced Research Projects Agency – Energy (ARPA-E) was established in 2007 and funded with $400 million in Recovery Act funding in 2009.
- For large projects: DOE loan guarantees provide an avenue to help companies obtain financing.
- Companies looking for venture financing: There are a number of venture capital funds that are based in Hawaii and focused on Hawaii technologies; the Hawaii Venture Capital Association has a directory of the various companies.
Technology readiness level 9 represents a commercial technology – in DOE terms, the Actual system operated over the full range of expected conditions. At this point technologies are considered fully developed and, given that they serve a need and can be produced at the right price, are ready to be introduced to the commercial marketplace. An example is a residential solar water heater, or a vehicle that operates on biodiesel throughout the year.
Once technologies reach TRL 9, businesses should be seeking primarily private funding to finance and grow their activities, such as private equity financing and traditional bank lending.
Public resources are still available to help businesses grow, and businesses can help their customers identify tax credits, utility incentives, grants, and loans to help support the installation of commercial clean energy technologies:
- For small businesses and agricultural producers: U.S. Department of Agriculture, Rural Development grants are available to help rural farms and businesses install fully commercial renewable energy and energy efficiency technologies. The Hawaii office of the USDA provides connections to those programs, and summary information.
- For residential and commercial customers: Ratepayer-funded programs – KIUC (on Kauai) and the Hawaii Energy Efficiency & Conservation Program (on the Big Island, Oahu, and Maui County) – provide a range of incentives for efficient appliances, solar water heaters, and other measures.
- Companies looking for venture financing: There are a number of venture capital funds that are based in Hawaii and focused on Hawaii technologies; the Hawaii Venture Capital Association has a directory of the various companies. The National Renewable Energy Laboratory presents an annual Industry Growth Forum for clean energy startups to maximize their exposure to receptive venture capital, corporate investors, and strategic partners.
Karl Fooks (President of the Hawaii Strategic Development Corporation) discusses some challenges that business may come across while financing renewable energy projects.