Government: United States
Responsible government entity: National Renewable Energy Laboratory (NREL)
External partner: N/A
Target type of innovator: Differentiated by stage of maturity, from idea to technology readiness level (TRL) 6
- Vouchers that can be redeemed at national energy laboratories or other approved facilities in the American-Made Network are part of the prizes.
- Small cash incentives are used to encourage peer-to-peer support.
- The prizes are technology-specific, and each has a sponsoring government department (departments can propose problem statements for new challenges). The model allows for private-sector sponsors to fund NREL-led prizes.
Summary of the types of support provided or enabled by the policy initiative
Type of support
Direct: non dilutive grants awarded as prizes (without spending constraints)
Direct: vouchers for national energy laboratories and other facilities
Direct: support to help teams prepare for competition
Indirect: Recruitment support and business services via six third-party organisations
Direct: an online networking platform and rewards for peer-to-peer collaboration between network members
The US Department of Energy (DOE) and NREL initiated the programme to support innovations that could stimulate more domestic US solar manufacturing. The DOE sponsors it and NREL administers it. The first challenge, called Solar Prize, was launched in June 2018 and focused on solar manufacturing. The model has since been expanded to include prizes in technology areas including buildings, water, geothermal and advanced manufacturing. Each prize is unique, and while most focus on making inventive hardware solutions, some also encourage new business models or software solutions. Since 2018, NREL has customised several different prize structures to fit the needs of the programme as it has targeted additional technology areas.
Prizes are designed in co‑operation with DOE departments based on identified technology needs. In 2021, ten prizes were launched. The window for applications varies in length and can be between 4 and 12 months. If a prize has multiple steps, these may run sequentially, with total duration between launching the first step and completing the evaluation of the last step being two and a half years or more. HeroX, a private crowdsourcing platform, is used to register applications. An expert panel reads, scores and comments on video and written submissions, and NREL and the DOE sometimes hold interviews with applicants. The level of detail and length of evaluation depend on the nature of the prize topic and can vary for different award levels within a prize. The final prize judge is usually the DOE.
American-Made Challenges provides non‑dilutive cash prizes (i.e. public grants that are direct payments with unrestricted use) and in some cases, vouchers for national energy laboratories and other qualified facilities. Each prize targets different innovation stages and has different prize values, rules and timelines. For example, the American-Made Solar Prize Round 4 had three contests, designed as three escalating challenges:
- “Ready!” – cash grants of USD 50 000 for each of up to 20 winners at “ideation” stage, wanting to propose a path to prototype.
- “Set!” – cash grants of USD 100 000 and national energy laboratory vouchers1 up to USD 75 000 for each of up to 10 winners to further develop prototypes.
- “Go!” – cash grants of USD 500 000 and national energy laboratory vouchers up to USD 75 000 for each of up to two winners to perform pilot tests with an industrial partner.
Recipients can use laboratory vouchers to access equipment and expertise at the 17 national energy laboratories and other qualified facilities, and the rules also provide the possibility to spend part of the voucher at a private facility of the winner’s choice. NREL helps participants to locate and use the national energy laboratory and other facilities, including those that can make, test and validate specific pieces of technical equipment.
The monetary value of the laboratory services is agreed by the recipient and laboratory staff and debited from a dedicated American-Made Challenges budget at NREL. NREL, and other national energy laboratories, make available the resources to work with teams in exchange for the vouchers. Typical technical services to the start-up companies include product testing, validation, analysis and fabrication. In the American-Made Solar Prize, the vouchers were valid for one year from the award of the prize.
NREL subcontracts with third-party organisations that help teams prepare their entries in the competition. Six of these organisations, called Power Connectors, were selected for funding as part of the programme in 2020. The services provided vary according to organisation and prize. They include: assistance with recruitment; leading team-building events; implementing so-called Demo Days; linking the teams to technical expertise; and reviewing ideas, submissions and business plans. The Power Connectors are required to help the relationships they enable to have mutual benefit for all parties involved.
The American-Made Network includes national energy laboratories, incubators, investors, philanthropists, industry, researchers and other experts from around the United States. NREL asks network members to provide technical insight, marketing expertise, product validation and other support to start-ups and help to connect recipients with suppliers and customers. NREL is considering options for expanding the domestic network by adding connections to the Incubatenergy Network and similar opportunities with international networks. The network, which includes stakeholders that are not part of other DOE networks, is used to raise awareness of other DOE programmes and opportunities.
A novel element of American-Made Challenges is the availability in some of the challenges of small monetary rewards to network members that voluntarily support a team, usually one that goes on to win one of the prizes during the competition. The values are relatively small – rarely more than USD 10 000 each, once the available pot is divided – and are intended to serve as a bonus to publicly acknowledge and encourage support within the innovation ecosystem. Connectors are not only start-ups: they can also include academics, corporates, investors or other service providers. Competing start-ups in a given round cannot be a Connector for that round. NREL has tweaked the structure of these rewards as the prize designs has evolved into different technology areas, and integrated them mostly in the solar prizes.
NREL has developed a matchmaking tool, currently in beta version, and plans for it to become automated, including by using artificial intelligence to help match start-ups’ needs with relevant services and expertise in the network.
NREL collects data related to the teams’ experiences during the programme, their ongoing business success and interesting technical achievements. These results are shared with the DOE to enable programme improvements.
At this time, NREL does not currently evaluate applicants on their potential to reduce greenhouse gas emissions nor track their impact after receiving an award. However, it is working with DOE experts to see if these aspects can be included in future. The technology-specific prize design means that the underlying problem is already identified as a bottleneck to significant greenhouse gas reductions.
As of the end of 2021, 27 prizes had been launched, of which 10 are completed, 13 are in progress and 4 are open for applications.
Findings, according to staff involved:
- Researchers and entrepreneurs with innovative technology ideas are attracted to the prize format because the barrier to entry is lower than for traditional calls for public grants and loans. Because the prizes reward past efforts to develop new ideas they carry lower risk for the government than grants awarded for future work based on ex ante evaluations of applicants’ potential.
- American-Made Challenges has proven to be a speedier means of supporting start-ups than other existing US government grant programmes. Recipients that are able to advance through a series of time-based competitions can reach stages of maturity in months that could have taken years to achieve via other public programmes.
- Recipients mention that receiving even small amounts of unrestricted funding can be more impactful than receiving larger amounts of grant funding that are conditional on certain restrictions and reporting requirements. Despite being generally unfounded, some start-ups perceive a risk with government grants that the government could have a claim to resulting intellectual property and this would deter equity investors.
- The prize approach attracts all levels of ideas experience, bringing new innovators that have not traditionally worked with the DOE or national energy laboratories into contact with them. As some of the ideas would not be mature enough for traditional government funding programmes, American-Made Challenges has proven to be a relatively low-cost means of learning about the potential of a technology, team or business proposition.
- The ability to work directly with NREL researchers to identify available laboratory resources and possible testing programmes is highly appreciated because most innovators are unaware of how to work with national labs and do not know the range of available expertise, facilities and equipment.
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.
These can also be used at other qualified facilities.
These can also be used at other qualified facilities.