This article is sponsored by Wells Fargo.
Addressing the climate crisis requires scaling new clean technologies for every sector of the economy. Accordingly, the clean energy transition is referred to as the single greatest investment opportunity of this generation.
Investors poured a record-breaking $60 billion into cleantech in the first half of 2021, which represents a 210 percent year-on-year increase. Even still, cleantech startups face an uphill battle to commercialization. Startups working on “hard” technology, especially those operating in heavily regulated environments, must spend years conducting research and development in a laboratory setting.
Access to additional intellectual, technical and testing resources is crucial to helping startups cross this “technology valley of death.” The Wells Fargo Innovation Incubator has helped all 18 of its agtech and green buildings alumni companies advance from prototype or benchmark stage to the commercial-ready stage, by providing them with access to state-of-the-art facilities and world-class technical experts at the National Renewable Energy Laboratory (NREL) and the Donald Danforth Plant Science Center (Danforth Center).
After completing technical validation in the laboratory, though, cleantech startups face a second hurdle – the “commercialization valley of death.”
In order to get their technologies in the hands of end users, most early-stage companies need an opportunity to showcase that their technology will be a viable solution before ever making a sale. Companies often accomplish this through demonstration projects, small-scale projects that demonstrate the capabilities of innovative technologies in real-world conditions at scale. Such projects are a proven method for moving new cleantech technologies from the lab to the market, allowing startups to prove out their economic viability, low-carbon capabilities and positive social impacts.
Over the years, the Incubator has facilitated several demonstration projects for companies at NREL, Wells Fargo and Danforth Center facilities. For example, NREL’s Flatirons Campus in Colorado housed PowerFlex’s electric vehicle charging stations in 2017. NREL realized energy and cost savings from the demonstration project and later purchased more than 100 PowerFlex charging stations through a competitive bid. Now, PowerFlex has installed more than 6,000 EV charging stations across the country, helping customers manage changing electrical demands and conditions from the influx of EVs on the road today.
The Danforth Center has facilitated a demonstration project for Innovation Incubator portfolio company Aker Technologies with early validation of technology that automates the crop-scouting process. With help from the Incubator and the Danforth Center, Aker has since expanded its imaging methods to also be able to detect plant diseases for more targeted, reliable crop assessments to improve profitability and increase yields.
After working with NREL’s technical team to evaluate the technology’s performance in the laboratory, Whisker Labs conducted a demonstration project at a Wells Fargo branch in Aurora, Colorado in 2016, evaluating the competitiveness of its building energy consumption monitoring and optimization technology. The project provided the Whisker Labs team with insight into its technology’s practical applications and was also used to identify energy and cost savings opportunities at the Wells Fargo branch.
Now, Wells Fargo is piloting portfolio company Turntide Technologies to demonstrate and validate the commercial viability, energy efficiency and performance of its Smart Motor System. Through the Innovation Incubator program, NREL researchers helped Turntide validate the energy efficiency and performance of its Smart Motor System. Turntide has captured the attention of major investors including the Amazon Climate Pledge Fund and successfully installed more than 5,000 systems nationwide. Now, coming full circle, Turntide will help Wells Fargo make progress on its goal of reaching net-zero greenhouse gas (GHG) emissions by 2050.
Startups are not the only ones who benefit from demonstration projects. Private and public organizations can get a firsthand look at potentially game-changing technologies for zero capital expenditure or risk, spurring additional cleantech investment and decarbonization initiatives. That is why the Innovation Incubator is branching out to support demonstration projects with outside commercial and governmental agencies.
In early April, the Incubator announced its first all-demonstration cohort, which consists of five companies ready to demonstrate their technologies with industry partners across the country. The selected companies receive up to $250,000 in non-dilutive funding to support infrastructure for their projects, as well as technical guidance from the world-class researchers at NREL who will help prepare, validate or analyze the demonstration projects. These demonstration projects will serve as proof points for potential customers and investors who may want to take part in the project’s future success.
With residential and commercial buildings accounting for 13 percent of U.S. GHG emissions, three demonstration projects will test low-carbon technologies for the built environment. Cohort company BlocPower will work with industry partner Steffes to replace fossil fuel-based systems with carbon-free technologies and increase energy efficiency for buildings in diverse communities. Kit Switch will work with Habitat for Humanity Los Angeles to install and analyze its prefabricated kitchen modules with integrated plumbing and electrical systems in underused spaces. Community Energy Labs will demonstrate its artificial intelligence-powered clean building control platform for Tacoma Public Utilities and Tenino School District in an effort to support and assess decarbonization goals.
The other two demonstration projects will focus on electrification technologies for the transportation sector, which represents 29 percent of total GHG emissions in the United States. CorePower Magnetics will demonstrate its patented high-performance electric motors, inductors and transformers with Eaton, which can extend electric vehicle ranges and improve grid efficiency. NineDot Energy will work with Fermata Energy and Revel Transit to transform vacant and underused lots into shared community-scale power plants using solid oxide fuel cells and stationary battery energy storage.
With the addition of these five companies, the Wells Fargo Innovation Incubator’s total portfolio includes 61 startups. Since joining the program, portfolio companies have raised $1.1 billion in external follow-on funding — equivalent to an average of more than $81 for every $1 awarded by Wells Fargo through the Incubator.