Access to laboratory equipment and office space are two essential costs that can be difficult for early-stage companies to finance. Laboratory access is critical for developers of hardware products at all stages, from the earliest experimentation to prototyping and, later, product development for demonstration and sale. Furthermore, in highly regulated sectors such as energy there is often a need for accredited testing to ensure compliance with industry standards, whether for appliance safety, electricity grid integration or fuel supply norms.

Only a relatively small share of the clean energy technologies needed are software or devices with minimal high-tech components. The elaboration of most equipment requires precision development, repeated experimentation and generous assembly space. While universities might provide continued laboratory access to spin-offs (i.e. companies that develop technologies invented through university research), it is rarely free or optimised for industrial product design. Even electronic and digital technologies simple enough to be constructed on a laboratory bench or in the “fab labs” of well-furnished incubators can require access to the type of commercial demonstration and testing facilities only industrial facilities have. Some countries operate state-owned laboratories suitable for these needs or can help start-ups pay for access to third-party facilities.

Office space is another cost start-ups must bear. Governments rarely provide funding for it directly, but some programmes include it as an eligible use of public funds while others help start-ups finance space at incubators.

Direct approaches

Not all governments have state-run energy laboratories, but some countries that do have recently been exploring how to make this valuable resource available to start-ups. Three elements make public energy laboratories useful for SME development:

• Public energy laboratories – whether national or subnational – are atypical in having state-of-the-art facilities adapted to the commercial and industrial needs of the regulated energy business, including end-user equipment.
• Successful testing at these facilities is valuable for communicating technical verification to investors and companies.
• Because of their expertise and access to professional networks, research personnel at public energy laboratories can guide start-ups in refining their technology development and business model decisions.

Feedback from programmes that facilitate interaction between clean energy technology entrepreneurs and public laboratories indicates that the benefits outweigh the budgetary cost to the government. For start-ups, it would not be possible to buy equivalent access or expertise in the private sector for the same sum, and for laboratory personnel, these programmes present the chance to learn about potentially disruptive opportunities and technology needs.

In the American-Made Challenges programme, the US Department of Energy gives start-ups vouchers to access equipment and expertise at their 17 national laboratories and other qualified facilities. In this system, a start-up’s expenses are allocated to the programme budget, which is spent as the enterprise redeems its vouchers at the laboratory within a specified time frame. Start-ups can use vouchers to get support for testing the technology and to obtain advice from researchers at national laboratories. In some cases, if the laboratory does not have the appropriate testing facility or equipment, it may develop or procure it.

NREL’s IN² programme and the Shell GameChanger Accelerator also offer public laboratory support from NREL, which assigns a researcher to each start-up to guide it towards opportunities to accelerate commercialisation. These initiatives complement other federal US programmes to engage national laboratories more deeply in innovation and commercialisation.

Canada uses a different approach to help start-ups access expertise and testing at its federal energy-related research centres. Since 2017, SMEs applying to its Clean Growth in Natural Resource Sectors Program have been able to choose a model of funding known as Science and Technology Assistance for Cleantech (STAC). Under this schema, the SME and the research centre apply as a consortium led by the SME, and the government funds the work packages of the participating entities separately. This means that research centre costs are met by the government up to a total of CAD 9 million (USD 7 million) over five years across a network of eligible research centres.1 Natural Resources Canada also offered funding for federal laboratory support to finalists in the Breakthrough Energy Solutions Canada and the Women in Cleantech Challenge competitions, directly targeting clean energy technology start-ups. This model is now being refined for use in a wider set of programmes.

In Morocco, the Green Innoboost scheme facilitates access to two IRESEN facilities for R&D and testing: the Green Energy Park (GEP), inaugurated in 2017, and the Green and Smart Building Park (GSBP), operational since 2019.

Indirect approaches

Governments can provide start-ups access to laboratories indirectly, mainly by funding incubators and accelerators that offer this service to clean energy technology innovators.

In the United Kingdom, Energy Systems Catapult Living Lab is a unique initiative that brings together a network of digitally connected homes to serve as a safe and affordable real-world test environment. It was created in 2017 in recognition of the importance to the UK of energy efficiency and smart energy systems, as well as barriers to testing in real-world environments, especially for start-ups. Innovate UK, a public body, funds the programme through Energy Systems Catapult, an independent not-for-profit entity.

Energy Systems Catapult Living Lab allows innovators to design and test products, services and business models with real people in over 500 digitally connected, inhabited smart homes around the United Kingdom, covering a variety of tenures, property types and installed equipment. It has a permanently open call for proposals, so technology developers can make contact at any time to explore the possibility of using the Living Lab for testing.

In India, the Clean Energy International Incubation Centre (CEIIC) offers laboratory space and rapid prototyping as part of its services. Selected start-ups receive credits redeemable for infrastructure support over the duration of the 12-month programme, and these credits can be worth more than INR 2.5 million (USD 33 000) per start-up. Start-ups can also use infrastructure on a pay-as-you-go basis, paying either with cash or by yielding the equivalent equity value to Social Alpha.

The CEIIC has a rapid prototyping lab with 3D printers and scanners, circuit board printing and testing facilities. Plus, start-ups have access to six research facilities at Tata Power, including battery and meter testing laboratories, switchgear and power transformer workshops, and communications and smart grid laboratories. Hosted in the same building as Tata Power Delhi Distribution Limited’s Smart Grid Lab, CEIIC also has access to a testing facility for energy storage and smart grid applications, as well as to a solar PV generator.

Many incubators participating in the Government of India’s Technology Business Incubator (TBI) initiative are located at universities or research institutes and can therefore offer laboratory support. TBI-accredited incubators also provide office space to start-ups, and some have generic facilities (sometimes called “fab labs”) for rapid small-scale prototyping, as well as limited testing equipment. TBI-accredited incubators can upgrade their facilities by applying for government grants such as those available through the PRAYAS programme.

Governments have also been known to facilitate entrepreneur access to university and industrial laboratories, one example being the Technology Stations Programme of South Africa’s Technology Innovation Agency.

Furthermore, some government initiatives specifically incorporate laboratory access into programme design. Morocco’s Green Innoboost requires that start-up applicants co‑operate with at least one national scientific partner, such as a university. Under this system, IRESEN funds the university to provide the start-up with technology development and testing facilities.

Test beds are also a core part of Singapore’s EcoLabs-COI, with the government-funded programme providing access to Nanyang Technical University laboratories and facilities for prototyping and testing. In addition, EcoLabs-COI has partnerships with more than 30 test beds in external organisations that it can fund to test new ideas. Some of these test beds are located outside Singapore and include shopping centres, educational institutions and manufacturing sites. Ownership of intellectual property generated by EcoLabs-COI projects involving new products and services is shared by the start-up and NTUitive, a part of Nanyang Technical University. NTUitive supports the licensing of co‑developed intellectual property, including licensing it back to the start-up if it wishes to use it.

Meanwhile, Start-Up Chile ensures access to technical facilities in its incubation programme by signing agreements with sponsoring entities for each recipient start-up. The sponsor (for example a potential industrial customer) provides a venue for testing, is remunerated by Corfo and is required to report certain results. EIT InnoEnergy facilitates access to laboratory and testing facilities for start-ups in the EIT InnoEnergy Highway programme through agreements with partner organisations that commit to providing free or discounted access in return for participating in EIT InnoEnergy events and networks.

In China, the Yanqing New Energy Incubator is an example of how a municipal government can provide funding for a technology test zone, including for smart grids, solar-wind hybrid technology and electric vehicle charging equipment.

Direct approaches

The cost of procuring precision equipment is difficult for many technology hardware start-ups to cover. New companies with low credit ratings and an uncertain future are not in a strong position to negotiate, and besides, they often do not have enough laboratory space to house bulky equipment. To address this problem, some government programmes for clean energy technology start-ups offer procurement support. For instance, participants in Morocco’s Green Innoboost can make use of IRESEN’s procurement team, which will scout for and negotiate contracts on the public entity’s terms. If the start-up’s project is unsuccessful, the equipment becomes an IRESEN asset. Meanwhile, Start-Up Chile provides licences for essential software to certain early-stage companies developing digital services.

It is common for incubators to provide office space and cover administrative overheads for start-ups in an incubation programme. Among our case studies, EcoLabs-COI, EIT InnoEnergy Highway, Indigram Labs within the Technology Business Incubator initiative, and Start-Up Chile all include this service. In the case of Indigram Labs, the Indian Society of Agribusiness Professionals (ISAP), which hosts the incubator, provides the infrastructure. In the case of EIT InnoEnergy Highway, which is co-funded by the European Commission, office space is available if the start-up is located in proximity to one of EIT InnoEnergy’s eight European or one US premises.

In the Netherlands, PortXL is an example of an accelerator backed by a local public body (the Rotterdam City government) that focuses on clean energy and will pay a start-up’s residential and overhead expenses while the owner takes part in an intensive three-month programme.