Through its various agencies, the United States Department of Energy (DOE) administers dozens of different grant, loan and financing programs. In 2013 the DOE awarded $2.4 billion in grants to support a variety of energy-focused projects. That figure climbed to $2.5 billion for 2014. In addition to grants, the DOE also provides billions of dollars in loans and loan guarantees each year. Recipients of these funds include states, local and tribal governments, schools, universities and private sector businesses.
The DOE primarily administers its grant, loan and financing programs through the following offices:
- Advanced Research Projects Agency-Energy (APRA-E)
- Office of Energy Efficiency and Renewable Energy (EERE)
- Office of Nuclear Energy
- Office of Fossil Energy
- Office of Science
Of these, the majority of business grants for renewable energy projects are provided through ARPA-E and EERE. Business loans and other financing instruments for energy-related projects of all types are primarily administered directly through the DOE’s Loan Programs Office.
An overview of Advanced Research Projects Agency-Energy funding programs
The Advanced Research Projects Agency-Energy (ARPA-E) program is funded by the Office of Energy Efficiency and Renewable Energy and was officially launched in 2009 as the result of the 2007 America COMPETES Act, which was signed by President George W. Bush. Congress appropriated and President Barack Obama allocated $400 million in 2009 to begin funding the agency’s first projects. ARPA-E exists within the broader organizational framework of the Department of Energy and was modeled after the very successful Defense Advanced Research Projects Agency (DARPA), which has been credited with developing technological innovations such GPS (global positioning system), the stealth fighter jet and more.
As outlined in the America COMPETES Act, the goals of ARPA-E are to:
To enhance the economic and energy security of the United States through the development of energy technologies that result in—
- Reductions of imports of energy from foreign sources;
- Reductions of energy-related emissions, including greenhouse gases; and
Improvement in the energy efficiency of all economic sectors; and
- To ensure that the United States maintains a technological lead in developing and deploying advanced energy technologies.
ARPA-E realizes these goals by providing funding for clean and renewable energy projects that support these priorities. Funds are disbursed via a competitive grants process. Since its inception ARPA-E has provided funding for more than 300 potentially transformation energy projects. Grants awarded through ARPA-E range in size from $250,000 to up to $10 million.
ARPA-E does not provide 100% funding for any grant-supported projects. The laws governing projects funded through ARPA-E dictate that every Project Team must contribute at least 20% of the total project cost as cost share. Recipients of ARPA-E funds under Technology Investment Agreements and “other transaction” agreements must contribute at least 50% of the total project cost as cost share.
Funds are awarded through a variety of different programs—each of which has a specific focus. Each individual program is not ongoing but rather, accepts submissions only for a specific timeframe. ARPA-E does not accept unsolicited proposals. Instead, ARPA-E broadly solicits energy-related research proposals using periodic Open Funding Opportunity Announcements (Open FOAs), which are generally issued every two to three years. However, all ARPA-E programs and solicitations exclusively fund energy technology projects that:
- Identify and promote revolutionary advances in fundamental sciences;
- Translate scientific discoveries and cutting-edge inventions into technological innovations; and
- Accelerate transformational technological advances in areas that industry by itself is not likely to undertake because of technical and financial uncertainty.
In all cases, ARPA-E does not fund basic or incremental research.
An overview the Office of Energy Efficiency and Renewable Energy (EERE) funding programs
EERE works with business, industry, universities, and other organizations to increase the use of renewable energy and energy efficiency technologies. One way EERE encourages the growth of these technologies is by offering financial assistance opportunities for their development and demonstration. The overall goals of EERE are generally similar to those of ARPA-E. Toward that end, EERE uses Funding Opportunity Announcements (FOAs) to solicit applications in specific program areas and selects projects based on a merit review process that includes industry and technology experts.
Through its funding and support efforts, the Office of Energy Efficiency and Renewable Energy seeks to help ensure an American leadership position in the transition to a global clean energy economy. EERE funding supports research, development, demonstration, and deployment (RDD&D) through partnerships with United States businesses and research institutions. The program has the explicit goal of making a wide array of clean energy technologies directly cost-competitive (without subsidies) with conventional energy technologies in use today.
Toward that end, EERE investments are directed towards high-impact activities in the areas of sustainable transportation, renewable electricity, and end-use energy efficiency in buildings and factories. In prioritizing its RDD&D efforts, EERE utilizes the framework of its “5 Core Questions,” which include:
- High Impact: Is this a high-impact problem?
- Additionality: Will the EERE funding make a large difference relative to what the private sector (and other funding entities) is already doing?
- Openness: Has EERE made sure to focus on the broad problem that is being solved and is EERE open to new ideas, new approaches, and new performers?
- Enduring Economic Benefit: How will the EERE funding result in enduring economic benefit to the United States?
- Proper Role of Government: Why is what you are doing a proper high-impact role of government versus something best left to the private sector to address on its own?
An overview of the process by which EERE awards funding for energy projects is shown below (source: DOE):
Within EERE funds are directed towards specific technologies and project focuses. A breakdown of the EERE’s total 2014 budget by program area is as follows:
- Hydrogen and Fuel Cell Technologies: $93 million
- Bioenergy Technologies: $232 million
- Solar Energy: $257 million
- Wind Energy: $88 million
- Geothermal Technology: $46 million
- Water Power: $59 million
- Vehicle Technologies: $290 million
- Building Technologies: $178 million
- Advanced Manufacturing : $181 million
- Electricity Delivery and Energy Reliability: $147 million
- Nuclear Energy: $889 million
- Fossil Energy Research and Development: $562 million
- Advanced Research Project Agency-Energy (ARPA-E): $280 million
- Race to the Top for Energy Efficiency and Grid Modernization: $0