U.S. Department of Energy - Energy Efficiency and Renewable Energy

Commercialization

About

The Office of Energy Efficiency and Renewable Energy (EERE) is focused on broad market adoption of clean energy technologies. Crucial to this effort, is supporting the move of these technologies from DOE's National Laboratories to the private sector.

The Commercialization Team takes an aggressive approach to bridging the gap between research and development (R&D), and venture capital funding and marketing. The Team uses multiple strategies, programs, license agreements, technology showcases, etc., to identify opportunities and interest investors. EERE provides joint funding for projects, develops business opportunities through competitive solicitations, and tracks both federal and state incentives. The goal is to increase the rate and scale of energy efficiency and renewable energy technology market penetration.

Private capital markets aid in EERE's mission to "bring clean, reliable and affordable energy technologies to the marketplace."

Commercialization programs are designed to correct market imperfections and remove the non-market forces that restrict advanced energy technologies' deployment.

The Commercialization Team focuses on building bridges between Applied Scientists and Technology Investors, between the public to private sector. This challenge of transitioning the responsibility from scientists to early investors to the market is historically referred to as the "Commercialization Valley of Death."

Graph charts average cash flow, sales, and typical primary investors for a technology based on three phases of commercialization.  During "Technology Creation," the typical primary investor is DOE/NREL and the states.  With no sales, cash flow is negative. In the second phase, "Market-Focused Business and Product Development," typical primary investors early in this phase are entrepreneurial investors.  Early adopters and investors begin to buy the technology, but sales then drop off and cash flow continues negative, a stage called the "Valley of Death."  Afterward, the primary investor is a venture capitalist, and the general public (the "early majority") begins to buy.  In the last phase, "Early Commercialization," the typical primary investor shifts from the venture capitalists to the stock owners.  Cash flow increases with sales, peaks, and falls off as the technology is adopted by the general public.

One of the challenges of commercializing a new technology is overcoming the "Valley of Death," when heavy investment is required and sales are limited. Many valid and worthy technologies go underfunded in this period and never reach the market.


Commercialization bridges are designed to overcome four identified development gaps:

Information Gap:
Communication is fundamental to commercialization and technical language often sounds like gibberish to the business community.
Information Bridge:
Technology Commercialization Showcase

Capital Gap:
Venture capital funding is more likely to go toward business plans than research papers.
Capital Bridge:
Technology Commercialization Fund

Strategy Gap:
The Commercialization Valley of Death is not unique to national labs, and strategies have been developed to foster innovation.
Strategy Bridge:
Equity Share License Agreement

Commercialization contacts