Pushing Your Projects from 'No Go' to 'Go' With Government Funding

March 10, 2010
Under ARRA, industrial energy efficiency projects are receiving funding for industrial combined heat and power systems, district energy systems for industrial facilities, and grants to support technical and financial assistance to local industry.

Energy efficiency. Job creation. Alternative fuels. These are not only buzz words but key government initiatives that can be turned into potential grants or funding for your company -- if you have the right project presented with the right strategy.

Companies who successfully tap into government funding can gain a competitive advantage in bringing new technology to market, upgrading manufacturing facilities for energy efficiency and cost savings, and saving or adding jobs.

But the government doesn't just hand out money to make companies more competitive. One key to successfully securing government funding is showing that your project is in the national interest as well as your company's interest. To successfully compete for funding, it is important to gain access to the agency, understand how the project fits into their agenda, and differentiate it from others that will also pursue the award.

For example, one of our clients recently won a state-level grant to replace a 40-year-old boiler in its manufacturing facility, resulting in an annual savings of about $1 million in energy costs. While this internal investment had been on the company's list for years, other initiatives had always taken precedence. By applying for government funding, the project was pushed from 'no go' to 'go.' This project was a win-win situation because the company saved money in reduced energy costs and repairs and became more efficient. The government won because the state reduced its overall energy consumption in order to meet energy reduction goals.

The Process: How to Pursue Government Funding

If your company is interested in pursuing government funding, here are some general questions to ask yourself before starting the process:

1. What funding opportunities are available?

2. Which agency would be most interested in your project? Does your company have any relationships with government agencies currently?

3. Does the project align with the government's initiatives? Is this a win-win situation? Does this project contribute to any national priorities around energy efficiency, job creation, or even national security or competitiveness?

4. Why is your project better than any other? What is the value proposition?

5. Do you have the in-house expertise or resources to go after the funding and then manage the contract once awarded?

If yes, pursuing government funding opportunities could provide your company with a unique competitive advantage.

Where to look for funding right now? The initiative that receives the most press is the American Recovery and Reinvestment Act of 2009 (ARRA) which had a big focus on reducing the country's dependence on foreign oil. Research and development grants for new energy technology development in wind, solar, and biofuels along with federal tax credits and state funding opportunities for capital upgrades to reduce energy consumption have all been key initiatives in this Act.

Under ARRA, industrial energy efficiency projects are receiving funding for industrial combined heat and power systems, district energy systems for industrial facilities, and grants to support technical and financial assistance to local industry. While the DOE previously focused on companies that produce energy as an end product, today it's paying close attention to the industrial sector, which uses more than 30% of U.S. energy and is responsible for nearly 30 percent of U.S. carbon emissions. The Obama Administration has requested further funding for this industrial program, and expectations are that it will be well funded in future months.

Recent awards include $31.6 million from the DOE to ArcelorMittal USA to install an efficient recovery boiler to use the waste furnace blast gas from iron making operations to produce electricity and steam at its Indiana steel mill, saving 3.66 trillion btu annually from the waste gas. Some $7 million was awarded to Dow Chemical Company to replace an existing acetylene recovery system with an acetylene hydrogenation reactor system at a Louisiana ethylene plant, saving 0.85 trillion btu annually.

In all cases, job creation is a focus for the government. Just recently the Department of Energy (DOE) announced a new solicitation for an Energy Efficient Building System Design Hub, with $122M in award funding. The Hub will focus on research and development of highly efficient building components, systems, and models aimed at reducing energy use, minimizing net greenhouse gas emissions, and catalyzing an industry-wide shift to new technologies. The real focus in that solicitation will not only be the best technology but which team makes the best business case for implementing the technology.

While most of our clients are interested in the American Recovery and Reinvestment Act of 2009 (ARRA), tax credits and DOE research and development funds related to energy efficiency, we try to reinforce that the government always has invested billions in research and development projects and these investments have led to the United States having a competitive advantage in industries such as computer science, biotech and the pharmaceutical industries.

It is important to note, while the DOE and the National Science Foundation (NSF) have received the largest increase in funding, the Department of Defense (DOD) and Health and Human Services (HHS) still have the largest research funding budgets with $80billion and $30 billion worth of research grants.

The best approach to determining whether funding is an option for your company is to review all of your projects or programs and see how they align with the 13 different federal agencies and the state agencies that award funds. Consider opportunities from economic development funds to tax credits, to ARRA grants and traditional research and development funds. Once the right organization and opportunity is targeted the program needs to be positioned with the decision makers at that agency.

Susan Ward is the Founder and CEO of ITECS Innovative Consulting, www.itecs-innovative.com, a technology marketing company that helps businesses, universities and nonprofits -- fund, develop and commercialize high-potential technologies by leveraging the government as a funding source or customer. ITECS has secured more than $100 million in government funding and assisted in more than $500 million in successful technology product introductions.

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