Innovation Incubator (IN2)
This report is part of How Governments Support Clean Energy Start-ups
How Governments Support Clean Energy Start-Ups highlights and unpacks government initiatives that help entrepreneurs get new clean energy technologies to the market, and offers recommendations to inspire innovation policy for net zero emissions. Read the report, and explore the case studies.
Government: United States
Responsible government entity: National Renewable Energy Laboratory (NREL)
External partner: Wells Fargo Foundation
Target type of innovator: Start-ups with promising clean energy hardware technologies that have reached the stage of needing precision technology testing and refinement (technology readiness level [TRL] 3-8)
Links: https://in2ecosystem.com/
Key elements:
- The funding is from a private philanthropic source but the programme is administered by a national laboratory, allowing the selection process to be based on expert referrals and the application process to be invitation-only rather than a call for applications. The model, which includes detailed expert evaluation of potential recipients, has been replicated with a different funder.
- Technology validation by a renowned national energy laboratory has significant value for potential investors, and working with innovative start-ups enhances the ability of government researchers to think about radical new technology solutions.
- Each recipient is assigned a technical adviser from NREL or their partner laboratory to guide them through the support available.
Summary of the types of support provided or enabled by the policy initiative
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Type of support |
|||
|---|---|---|---|
|
Financial |
Infrastructure |
Services |
Networking |
|
Direct: non dilutive grants by NREL of privately sourced funds |
Direct: access to national energy laboratories |
Direct: access to technical expertise and industry experts |
Direct: access to the Channel Partner network of incubators, accelerators and universities |
The Innovation Incubator (IN2) programme is a partnership between NREL, the Wells Fargo Foundation and the Donald Danforth Plant Science Center. NREL’s Innovation and Entrepreneurship Center has operated it since 2014 to boost the commercialisation of clean energy innovations by harnessing the capabilities of the national energy laboratories alongside NREL’s network of researchers, innovators, investors and industry partners.
Between 2014 and 2020, Wells Fargo Foundation provided a total of USD 50 million to the programme.
How support is made available and allocated
IN2 identifies companies with support from a network of 60 “channel partners”, including incubators, accelerators and university programmes that refer start-ups to NREL. This approach reduces administrative costs and constraints, but is made possible only by the use of philanthropic non‑taxpayer funds.
After a review of identified companies by technical, philanthropic and industry boards, IN2 selects each cohort of around five start-ups based on their potential to contribute to tackling problems in a specific area. These areas are mostly related to agriculture and buildings technologies, the latter supported by NREL technical facilities. IN2 welcomes two cohorts each year.
Financing
Selected companies receive a non‑dilutive grant of up to USD 50 000 for project support, such as equipment, materials or travel.
Infrastructure
Access to national energy laboratories is at the heart of IN2. Selected companies receive up to USD 200 000 for technical support at one of the participating national laboratories (NREL and the Donald Danforth Plant Science Center). This is in addition to the USD 50 000 cash grant and it covers the staff time and other costs at the national laboratory to conduct a technical project. NREL has the resources to make unique test and demonstration configurations. Over 12 to 18 months, an assigned laboratory researcher guides the recipients through the process of testing, validating and improving their technology solutions.
Services
IN2 recipient start-ups receive continuous expert guidance and technical assistance from NREL researchers.
Networking
In addition to technical assistance from national laboratory researchers, the programme management team at NREL’s Innovation and Entrepreneurship Center helps to connect companies to its large network of investors and industry partners, as well as incubators, accelerators and universities (the Channel Partners network), which can in turn facilitate access to expertise, services and other contacts.
Evaluating and tracking impacts
During the selection process, prospective recipients have to estimate their potential environmental impact. However, they sometimes overestimate their potential impact when they are at an early stage of development or are unable to predict the potential impact accurately. When necessary as part of the technical project, NREL also estimates potential emissions reductions as it evaluates the technologies to help the companies provide evidence to potential customers. NREL is working with the Massachusetts Institute of Technology (MIT) to evaluate issues and methods of tracking tools and methods across the ecosystem.
NREL asks recipients to complete annual surveys during and after the programme to track the impact of the start-ups.
Experiences and learnings so far
Up to 2021, IN2 had supported 56 start-ups, all of which are still active.
A virtuous circle has been found to operate between recipient start-ups and the national energy laboratories. Technology validation by a national energy laboratory has significant value for potential investors, and working with innovative start-ups enhances the ability of government researchers to think about radical new technology-based businesses.
To capitalise on the experience of IN2, NREL and Shell launched the Shell GameChanger Accelerator (GCxN) in 2018. Unlike IN2, GCxN has calls for proposals in more specific technology areas. GCxN targets earlier-stage technologies and supports the development of these technologies until their prototype demonstration stage.
This publication has been produced with the financial assistance of the European Union as part of the Clean Energy Transitions in Emerging Economies programme. This publication reflects the views of the International Energy Agency (IEA) Secretariat but does not necessarily reflect those of individual IEA member countries or the European Union (EU). Neither the IEA nor the EU make any representation of warranty, express or implied, in respect to the article's content (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the publication.
The Clean Energy Transitions in Emerging Economies programme has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 952363.
