Clean Energy Incubators as Critical
Commercialization Centers
Best Practices Report #2
May 2016
Executive Summary
The Incubatenergy Network (incubatenergy.org) is a consortium of clean-energy-focused
incubators across the United
States that individually have supported more than 350 early-stage
companies to date and collectively maintain a significant pipeline.
Members of the network—which
was launched in February 2015
by the Electric Power Research
Institute (EPRI), together with the
U.S. Department of Energy (DOE)
and National Renewable Energy
Laboratory (NREL)—are wellestablished incubators united by
a shared mission and passion for
a clean energy future.
Incubatenergy members are
shown in the figure at right.
Across the past year, EPRI and
NREL have found that these
incubators have nurtured many
of the most promising U.S. companies with new clean energy
technologies and business models entering the marketplace or
approaching commercial readiness. Leading incubators provide
a variety of support services,
as needed, as part of a holistic
approach for identifying, nurtur-
ing, and advancing innovations
to real-world applications. Their
flexible, proven processes yield
next-generation businesses
whose success rates far exceed
those of companies outside the
incubator system.
Incubatenergy Network Members
The Incubatenergy Network
brings successful incubators together in a well-organized forum
for sharing information, experiences, and services. Collaboration is strengthening the U.S.
clean energy ecosystem, making
the network more valuable than
its individual parts. The result is
a growing group of companies
that have been extensively vetted,
guided, and supported—increasingly by more than one network
member—to collectively offer
investors the best possible cleantech deal flow in the nation.
infrastructure, and supporting
other cleantech objectives.
Many of these companies could
grow globally, with proper funding plus continued sound strategy. The success fostered by
Incubatenergy Network members
is clearly represented by performance metrics in areas such
as follow-on funding, economic
impact, quality, and access to
mentoring and other services.
Promising U.S. companies are
bringing to market technologies and ideas of potential global
importance for mitigating climate
change by managing energy use,
increasing efficiency, expanding
renewable energy deployment,
accelerating adoption of electric
vehicles, promoting distributed
resources, modernizing grid
Clean Energy Incubators as Critical Commercialization Centers
This white paper, the second in
a series, provides further details
and presents case study examples
of successful companies and ini-
2
tiatives. Incubatenergy members
are delivering added value to the
cleantech space through their
honed due diligence, proven
services, and increasingly strong
network. They are creating opportunities to help quickly scale
up and deploy innovative clean
energy solutions.
Table of Contents
Introduction................................... 3
Funding ........................... ................ 3
Economic Impact........................... 5
Quality............................................. 6
Connectivity................................... 7
Conclusion................................... 8
Introduction
The first white paper from the
Incubatenergy Network provided
an overview of the services that
leading clean energy incubators
offer to support their portfolio
companies. This paper focuses
further on how these services
lead to higher levels of success.
Incubatenergy members have
been operating individually in
their own geographic regions
for years or even decades. Many
address water conservation and
other cleantech fields. Some
reflect regional strengths, such
as vehicles in Michigan, or solar
in California. All have established
credibility within their regional
ecosystems and with investors.
Many leading U.S. clean energy
incubators are based at universities or have established direct
inroads with university technology transfer offices. Most are
supported by a combination of
public and private sector funding.
All have time-tested due diligence
procedures and very selective admissions. Each provides services
to startups in the clean energy
field. These services include access to desk/laboratory/maker
space; to mentoring, legal, business, and graphics services; and
to pitch coaching, hackathons,
and networking events. In addition, leading incubators facilitate access to pilot customers,
joint ventures, and private venture capital, and they help with
lengthy applications for various
government programs and grants.
INCUBATOR INDICATORS
Collectively, Incubatenergy
members have supported more
than 350 companies and now are
working together to drive even
greater value across the national
clean energy ecosystem. Just in
the first year of network development during 2015 and early 2016,
many incubators established formal partnerships allowing for the
exchange of portfolio companies,
through a trusted system of referrals, to help entrepreneurs more
efficiently find the resources they
need to succeed and to open up
new markets. This well-developed
and growing ecosystem delivers
enormous value, reflected in impressive performance metrics.
OUTPUTS
Selectivity: <10% of
vetted companies chosen
for incubator support
Funding: >$1 billion in
follow-on support from
public/private sources
Connectivity: >500
mentors plus facilities,
partners, and industry allies
Revenue: >$330 million
in revenue and rapid
growth potential
Progress: holistic services
for technology readiness
and market visibility
Jobs: nearly 3000 direct
employees plus indirect
economic benefits
extensive mentor networks, and
connectivity with industry stakeholders. Together, Incubatenergy
members fulfill critical roles in
the U.S. clean energy technology
commercialization process.
Funding
Companies supported by Incubatenergy members have collectively received over $1 billion
in follow-on funding. In early
2016, for example, ACRE portfolio
company United Wind attracted
$200 million to apply its innovative business model, analogous to
leasing rooftop solar, to transform
the distributed wind market.
The metrics and case study
examples in this paper describe
strong funding and revenue,
significant economic impact,
highly selective acceptance rates,
Clean Energy Incubators as Critical Commercialization Centers
INPUTS
3
Over the last year, the successful funding rounds achieved by
many other companies demonstrate the deep strength of
support that leading incubators
deliver. For example, 10 companies supported by Greentown
Labs closed Series A rounds,
highlighted by Altaeros Energies,
Bevi, and Voxel8 raising over $5
million each. Oregon BEST company Energy Storage Systems also
raised a Series A round of nearly
$5 million. Bidgely, supported by
the Energy Excelerator, recently
raised $16 million and is participating in EPRI research on nonintrusive load monitoring.
Case Study 1: Accio Energy, NextEnergy & CET
Several successful early-stage
companies have been supported
by more than one Incubatenergy
member, showing the strength
of this community model. For
example, Go Electric has received
support from both the Energy Excelerator and Clean Energy Trust
(CET). It recently raised $4 million in Series A funding, plus was
selected to join the Wells Fargo
Innovation Incubator, co-administered by Wells Fargo and NREL.
Case Studies 1 and 2 highlight
companies that recently raised
funding and are engaged with
EPRI and utilities through the
Incubatenergy Network. New
connections and resources are
helping these companies more
quickly scale, develop markets,
and deploy energy innovations.
Accio Energy, supported by NextEnergy and a finalist in the 2015
Clean Energy Trust Challenge, most recently received nearly $5
million in ARPA-E funding for its electrohydrodynamic (EHD) wind
technology. Based on innovation scouting, an EPRI Technology
Insight Brief features the potential benefits of Accio’s approach for
generating renewable energy from wind and water mist. CEO Jen
Baird explains how incubators have contributed to the company’s
success to date: “NextEnergy and CET provided valuable support
in developing our turbine-free offshore wind energy technology
by connecting us with their networks of industry contacts, sharing
their insights into the cleantech space, and linking us with potential
funding sources. In addition, they provided essential cash and inkind support for Accio’s ARPA-E award to help advance the commercial readiness of EHD wind technology.”
Credit: Accio Energy
Case Study 2: SkySpecs & NextEnergy
SkySpecs, supported by NextEnergy, recently raised $3 million to support commercialization of its collision
avoidance and other innovations for automated drone inspection. The founders were named to the 2016 Forbes
“30 Under 30 in Manufacturing” and as a result of contacts with EPRI are currently
working to conduct pilot test programs with several utilities. CEO Danny Ellis explains
the critical impact of entrepreneurial support programs: “Incubators and accelerators,
like NextEnergy and Techstars, have played a critical role in our development at SkySpecs. Early on, these programs helped us focus on customer development, testing a
minimum viable product, and developing a solid pitch deck and value propositions.
Then they helped connect us to potential customers and investors. Their internal staff
and networks are incredibly willing to help, throughout all stages and aspects of our
business. Any time we have questions, concerns, or just general updates, they have
always been available to act as a sounding board and mentor. We owe a lot of our success to these programs.”
Credit: SkySpecs
Clean Energy Incubators as Critical Commercialization Centers
4
Economic Impact
Leading clean energy incubators
help portfolio companies and
their technologies and business models mature and scale
more rapidly to create jobs and
revenues. Case Studies 3 and 4
provide examples of growing
companies. Over time, companies supported by Incubatenergy
members have generated more
than $330 million in revenue.
Almost 3000 people are directly
employed by graduated firms.
Technology Incubator (ATI), and
other Incubatenergy members
have completed recent economic
impact studies showing regional
clean energy sectors to be worth
billions of dollars, to be accounting for tens of thousands to
hundreds of thousands of jobs,
and to be exhibiting growth rates
exceeding those of other sectors.
A new study supported by CET
looked at impacts across the Midwest and found over 500,000 jobs
in the clean energy sector, with
strong growth every year.
Incubators make other important
contributors to regional clean energy ecosystems, both by informing economic development and
planning and by making strategic
investments. CET, the Austin
Case Study 5 describes how the
LA Cleantech Incubator (LACI)
and its industry-government partners are setting an example while
supporting the green economy in
Los Angeles.
Case Study 3: Chai Energy & LACI
Chai Energy, supported by LACI, recently was named one of the winners
of a California Demand Response Auction Mechanism award for its innovative approach to increasing grid-edge flexibility. The company uses
smart meter data and a simple mobile app to help customers manage
energy use. CEO Cole Hershkowitz explains how the company is growing rapidly with incubator support: “Chai has been at LACI since it was
only 6 months old, when it was hardly more than two recent Caltech
graduates. We have grown to 9 full-time employees, helped thousands
of customers statewide save money
on their electric bills, and forged
partnerships with multiple Fortune
500 companies. LACI has helped Chai
with everything from completing grant
applications to finding and hiring key
team members. LACI has also been
invaluable in providing perspective on
important high-level strategic decisions around partnerships, fundraising, and production direction.” Credit: Chai Energy
Case Study 4: Ibis Networks & Energy Excelerator
Ibis Networks, supported by more than $1 million from the Energy Excelerator, is deploying over 1000 plug-load management devices across
three university campuses. COO Kevin Hause explains how the incubator
has helped drive the company’s growth: “One of the key factors in Ibis’
success is the Energy Excelerator. In addition to the amazing mentoring
and connections made with other members of our 2014 cohort, we have
had long-term support and involvement from the accelerator’s team as
well as its ever-expanding family of portfolio companies. This network has
yielded new partnerships, projects, and even investments along the way.”
Clean Energy Incubators as Critical Commercialization Centers
5
Credit: Ibis Networks
Case Study 5: LADWP & LACI
The dynamic downtown Arts District in Los Angeles now features
an additional source of creativity,
the La Kretz Innovation Campus. It
was developed by LACI in collaboration with the city and the owner
of the campus, the Los Angeles
Department of Water and Power
(LADWP). It represents the new
hub for the city’s cleantech industry—a place where entrepreneurs,
engineers, scientists, and policymakers can collaborate, promote,
and support the development of
innovative technologies and the
city’s green economy.
The 3.2-acre campus includes a
fully renovated 60,000-square-foot
building with offices, conference
rooms, “plug-and-play” workshops, prototype manufacturing facilities and equipment, a
training center, and event space.
Co-located LADWP laboratories
focus on innovation in customer
engagement and energy efficiency.
Adjacent to a new Arts District
Park, the campus also includes a
175-kilowatt solar parking canopy
plus greywater filtration, bioswale
runoff control, and microgrid systems, all in the heart of the city’s
burgeoning cleantech corridor.
Quality
in the process of developing and
refining working prototypes or in
scaling up for commercial deployment. The number of companies each incubator reviews
is representative of those that
are evaluated in depth, among a
much greater quantity of entrepreneurs who do not qualify for
the review process, based on a
variety of considerations.
Incubatenergy members have acceptance rates of 10% and lower,
reflecting strong deal flow and a
highly selective review process.
For example, reports from just
three incubator programs indicate that they reviewed a total of
more than 550 companies over
the past year but admitted only 51
into their programs. Lower acceptance rates are common.
Only the highest-quality companies, at an appropriate stage
of development, are chosen.
Some worthy companies are being turned away, as the demand
for incubator services exceeds
available resources. For example,
Companies chosen for support
by leading indicators first undergo an initial screening process
in order to qualify for in-depth
review. Generally, they must be
Greentown Labs has a long waiting list and is currently engaged
in an $11 million expansion to accommodate unmet demand. Case
Study 6 highlights a success story
from one Greentown company.
Case Study 6: NBD Nano & Greentown Labs
NBD Nano makes novel materials and coatings and is currently working on a utility
pilot program to test its hydrophobic coating for improving heat transfer efficiency
in steam condensation systems. Mechanical engineer Andrew Whitehead explains
how the company’s development has benefited from incubator support: “Greentown Labs has been very important as a major capital-stretching tool. The low rent
per square foot of lab space has allowed us to operate major testing equipment for
Credit: NBD Nano
our condensation project and generate data for pursuing grant funding and presentation opportunities, including at an EPRI conference. The equipment was built
in Greentown’s machine shop. Greentown provided the CAD software used to design the equipment, as well as
the Mathworks software used to process collected data. And the great community at Greentown is very helpful
to our growth; expertise is often expensive to come by for an early-stage startup company, but talented members of the community are always willing to pass on advice or contacts. The corporate and sponsor network has
also helped speed business development.” Clean Energy Incubators as Critical Commercialization Centers
6
companies based on connections
developed through the Incubatenergy Network. Several collaborative projects are under way,
with early-stage companies and
utilities working together on pilot
testing and early deployment programs. Many of these companies
are featured as case studies in
this report.
Connectivity
Support from mentors and connections with industry stakeholders are critical for allowing earlystage companies to advance and
deploy their innovative solutions.
Case Studies 7 and 8 highlight examples. Across the Incubatenergy
Network, there are over 500 mentors offering critical expertise and
technical consulting services to
entrepreneurs. In addition, incubators facilitate connections with
other important stakeholders,
such as national labs, research
groups, investors, utilities, and
other potential customers, and
they help provide technical support such as filing for patents.
Over the past year, EPRI has engaged with a number of portfolio
Case Study 7: AllCell Technologies & CET
AllCell Technologies, supported by CET, employs innovative phasechange materials for thermal management in batteries and other equipment. Currently, the company is participating in an EPRI project on
thermal energy storage applications. CEO Said Al-Hallaj explains how the
incubator has assisted his company: “CET is playing an instrumental and a much-needed role
in supporting clean energy startups in the Midwest. AllCell has
benefited immensely through
financial assistance, as well as
high-value introductions to leading organizations and businesses
nationwide. CET’s support has
added credibility and strengthened our business development
Credit: AllCell Technologies
efforts.”
NREL has established strengthened connections with Incubatenergy members in two key
ways. First, portfolio companies
now have greater visibility on the
brainpower and specialized testing facilities available to eligible
small businesses through the
Case Study 8: Ideal Power & ATI
In 2010, ATI facilitated a partnership between Austin Energy and the
City of Austin to test power converters developed by ATI portfolio
company Ideal Power. Significantly smaller, lighter, and more efficient than conventional converters, Ideal Power’s technology was
able to dramatically reduce the physical footprint of a 30-kW inverter deployed at the Austin Convention Center. The validation from
this successful pilot project allowed the company to raise follow-on
funding and file for an initial public offering in 2013. Now listed
on NASDAQ (IPWR), Ideal Power continues to grow, deploying its
power electronics solutions for integrating renewables, battery storage, and other technologies in major installations across the United
States and Asia.
Clean Energy Incubators as Critical Commercialization Centers
7
Credit: ATI
U.S. national laboratory network.
Second, researchers from NREL
and other DOE labs are gaining
exposure to proven approaches
for transitioning their discoveries
to technology developers for successful commercialization. Case
Study 9 describes these programs
in more detail.
Case Study 9: NREL, ATI, CET & NextEnergy
NREL, with facilitation by Incubatenergy members, has shared information with promising companies on DOE’s Small Business Vouchers
pilot, launched in September 2015. To overcome critical technology and
commercialization challenges, eligible small businesses can receive
up to $300,000 in technical assistance from national lab facilities and
researchers to support prototyping, materials characterization, performance validation, modeling and simulation, and other activities. The
workscope also can include intermediate scaling to generate sample
pre-commercial products for potential customers.
Conclusion
The DOE Lab-Corps program, managed by NREL, aims to empower
national lab researchers to understand market drivers and successfully
transition their discoveries into high-impact commercial technologies.
ATI and CET helped with the development of the initial Lab-Corps curriculum, and NextEnergy allowed NREL to launch its first mini-cohort of
lab teams in 2015 through the curriculum of a larger I-CorpsTM Energy
and Transportation cohort. These incubators continue to help NREL
and, in some cases, individual Lab-Corps teams.
Incubatenergy Network members are critical commercialization centers for the clean energy
entrepreneurs who are driving
innovation across the electric
power industry and other major
economic sectors. By providing
technical and financial assistance
and facilitating connections
with industry partners, mentors,
funders, and other key stakeholders, leading clean energy incubators are helping accelerate the
development of innovative energy technologies and business
models from concept to commercialization.
Metrics and case studies addressing follow-on funding, revenues,
job creation, and more highlight
how these incubators work to
help their portfolio companies
Clean Energy Incubators as Critical Commercialization Centers
8
achieve success. They represent
a highly curated source of deal
flow from around the country—
and they provide investors, agencies, and industry with opportunities to support scaling and
early deployment of clean energy
innovations.
ABOUT
The Incubatenergy Network is a community of clean energy incubators
distributed around the country, working together to share best
practices and build connections for supporting the entrepreneurs who
are driving innovation in the energy industry.
The network is supported with funding from the U.S. Department of
Energy and the Electric Power Research Institute (EPRI), managed in
partnership with the National Renewable Energy Laboratory (NREL).
RESOURCES
www.incubatenergy.org
www.twitter.com/incubatenergy
www.facebook.com/incubatenergy
EPRI
Beth Hartman, 720.618.1542, [email protected]
NREL
Meghan Bader, 303.549.7792, [email protected]
Acknowledgment: The information, data, or work presented herein was funded in part by the Office of Energy Efficiency and Renewable Energy (EERE), U.S.
Department of Energy, under Award Number DE-EE0006653.
Disclaimer: The information, data, or work presented herein was funded in part by an agency of the United States Government. Neither the United States
Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for
the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately
owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of
authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.
Citation: This white paper was developed by EPRI, in collaboration with NREL and members of the Incubatenergy Network. It may be downloaded from
www.incubatenergy.org or from www.epri.com as EPRI product 3002008811.