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ARPA-E: America’s Green Innovation Engine

In this four-part series, we are examining the environmental government research agency ARPA-E and how its work intersects with the interests of the commercial real estate sector. We’ll begin with a high-level look at ARPA-E as an agency before delving into three specific programs that relate to building efficiency: SHIELD, DELTA, and BEETIT. These programs coordinate a constellation of long-shot research projects related to window-pane insulation, heating and cooling localization, and HVAC efficiency, respectively.

Read part two, Designing a SHIELD for Single-Pane Windows; part three, Managing Buildings’ Heat DELTAs; and part four, If you can’t take the heat, just BEETIT. And don’t forget to sign up for the newsletter at the bottom of this page to get weekly updates!

Innovation is, perhaps, the single greatest engine of growth in the American economy. As scientists identify new materials, new technologies, and new manufacturing methods, those discoveries percolate into the commercial sector, leading to a cycle of discovery, adoption, scale, and finally maturity, at which point the cycle starts over again.

Common mythos tends to ascribe innovation to the world of free enterprise, and some level of innovation does come from this area, but the main drivers of technological discovery in the U.S. have, for the past several decades at least, been the public sector. One need only look at the track record of the Defence Advanced Research Projects Agency (DARPA) to find the government’s helping hand in virtually every piece of advanced technology in use today: The technologies underlying the internet, Google Maps, Siri, Tor, and every modern OS all originate with the military innovation agency.

Inspired by the successes realized under DARPA, the Obama administration created the Advanced Research Projects Agency – Energy, or ARPA-E. This seven-year-old child of DARPA is innovating on the cutting edge of clean energy, efficiency, and the technologies that enable them.


The ARPA-E Process

Like its predecessor, ARPA-E has a near-unique approach to the innovation process, a focus on blue-sky research, and a penchant for cheeky acronyms. (This abbreviative awareness may help to explain why the agency opted for “ARPA-E” over the sillier-sounding “EARPA.”)

The agency’s remit, as provided under US Code Title 42, Chapter 149, Subchapter XVII, § 16538, is to protect America’s competitive edge by:

1. Identifying and promoting revolutionary advances in fundamental and applied sciences;

2. Translating scientific discoveries and cutting-edge inventions into technological innovations; and

3. Accelerating transformational technological advances in areas that industry by itself is not likely to undertake because of technical and financial uncertainty.

In more plain terms, ARPA-E funds research programs that have the potential to produce revolutionary advances in areas related to energy. Just as important, they pick projects that have a reasonable long-term chance of success, but which the private sector has neither the patience nor the risk tolerance to fund itself.

They do this by identifying leaders in various fields, providing the framework and funding (ARPA-E operates on an annual budget of about $300M), and, basically, letting them run the show. Program directors choose the early-stage projects that will be funded under the auspices of their program and work with researchers to set benchmarks that will help them to reach viability by the end of their three years.

ARPA-E’s program directors aren’t regular employees. They typically come from top research universities and cutting-edge businesses and rotate back into the private sector when their projects are finished. By letting the country’s best and brightest run the show, the agency intends to avoid the biases and rigidity of thought that might come with a more typical organization and that could lead to stagnation.

Because ARPA-E prides itself on what it calls Active Program Management, “tech-to-market” advisors are possibly just as crucial. The tech-to-market advisor that is assigned to each project helps the team plan their research with a real-world application in mind in order to increase the chances that it will find a useful niche in the real world.

“A lot of times, people who invent early-stage technologies aren’t looking at, or haven’t really thought about where these things are going to go,” explained Peder Maarbjerg, assistant director for external coordination with ARPA-E. “Or they think they know, and then when they go talk to the people in those industries, it’s not actually the [right market for their product].”

Maarbjerg used batteries, a focus for numerous ARPA-E projects past and present, to illustrate his point.

“So I’m making a great car battery, and I’m going to go sell this to a car company,” Maarbjerg suggested. “Well, that company doesn’t buy batteries, they buy battery systems. So, at one point you have to learn that there’s a battery system manufacturer you’d be selling to. And as you start your research, things like the specs and size of the batteries that fit into these systems are better dealt with pre-invention than at the end. And the tech-to-market advisor sets you on that path.”


ARPA-E’s Track Record

Compared to DARPA, ARPA-E is still quite young. By design, the projects supported by the ARPAs are extremely ambitious and long-term in nature. It is precisely this extended time frame that makes these projects a poor fit for the private sector. Venture capital, the financial instrument that would normally support a risky research endeavor, generally prefers to exit on an investment within five years. Compare that to the roughly 25 years that it took the internet to go from research to mass adoption (1969 to the mid-1990s).

Even so, ARPA-E has established a remarkable reputation for yielding successful projects. Recipients of ARPA-E grants have developed a megawatt silicon carbide transistor that is the size of a fingernail, a virtually isothermal energy storage system that uses compressed air, and a microbe that makes fuel out of hydrogen and carbon dioxide, to name a few.

Perhaps more telling is that, combined, 74 project teams have received $1.8 billion in private sector follow-on funding over the past seven years. This is more than the $1.5 billion that ARPA-E has provided since its 2009 inception, spread across 580 projects. A total of 56 projects have formed the bases of new companies, and 68 projects have received further funding from other government agencies, according to an ARPA-E press release.

The agency hasn’t had its ‘internet’ moment yet, but there is little doubt in the scientific community about ARPA-E’s value to American innovation. If, as economists like Mariana Mazzucato and technologists like William Bonvillian are predicting, the next major wave of innovation comes from the green energy sector, ARPA-E will be America’s first and best chance of riding at the front of it.

Read part two, Designing a SHIELD for Single-Pane Windows; part three, Managing Buildings’ Heat DELTAs; and part four, If you can’t take the heat, just BEETIT. And don’t forget to sign up for the newsletter at the bottom of this page to get weekly updates!

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