To advance energy innovation, the U.S. must modernize its federal grant processes
It’s no secret that innovation supports American economic security and competitiveness, and federal funding is often necessary to overcome the initial investment required to prove newer technologies are ready for broad-scale applications. Once the federal funding is available, industry investment tends to follow. Recently the U.S. saw so much demand for the Department of Energy (DOE) Industrial Demonstrations Program (IDP) grants and the 48C tax credits that applications were oversubscribed, indicating that the appetite for innovation is strong and that federal incentives play an important role.
Despite industry enthusiasm, however, applicants face hurdles to accessing federal funding. Onerous application processes and review timelines as well as unclear grant requirements slow the process down and can even scare off would-be innovators. While some level growing pain is typical for new programs, there are key things federal agencies can do to improve operations — increasing efficiency, using resources more wisely, and better serving industry and innovation.
The new U.S. administration has a clear opportunity to improve agency operations to make federal programs more efficient to bolster American innovation and competitiveness
1. Simplify the application and notification process
Federal grant programs do not currently provide an easy interface for applicants to learn about opportunities, ask questions, or coordinate applications across multiple programs or offices. Individual offices have separate newsletters communicating information about available grant opportunities, leading to inconsistent communication. There should be a more unified way of alerting potential applicants to grant opportunities and sharing information about project selection and engagement opportunities.
Federal agencies should also allow applicants to submit one application for multiple funding programs.1 A single application process would enable applicants to prepare a description of a project with one set of standardized application requirements and even the playing field across new and experienced grant applicants.2 One application process would also allow federal agencies to establish simplified criteria for evaluating grant applications.
2. Provide clear expectations of information needs and communications to applicants
Applicants need to understand what information agencies require as part of a grant application, negotiation, or award process. These processes often vary from program to program or office to office. Consequently, applicants often find themselves in a “hurry up and wait” scenario in which they must rush to gather the necessary information to comply with grant processes, then must wait long periods for agencies to reach back out for additional information. Agencies should be clear upfront about the information needs required from applicants and designate early “screeners” to alert grant managers to information gaps or follow-ups based on applications.
3. Clarify grant requirements and legal basis up front for both grant managers and applicants
Applicants also need to understand applicable grant requirements. Grant requirements have a legal basis and must be followed for grant eligibility. Yet some agency practices may reflect how agency staff are accustomed to carrying out a program and not actually have a legal basis. Sometimes there is an accompanying policy document, but not always. These unclear practices make it challenging for applicants to understand what aspects of an agency request are truly required versus a flexible practice or agency preference. Agencies should articulate grant requirements and provide the legal basis. If there is no legal basis, agencies should articulate if there is a policy document or procedure that is the source for the practice.
The bottom line
Innovation has long been a cornerstone of American competitiveness. But federal agencies need the capacity and operational processes to successfully administer federal programs that foster American innovation. These processes are critical to project viability, having a direct impact on project timelines and costs. Transparency and standardization, clear expectations, and clarity on grant requirements are all critical to build more efficient operations that can achieve the highest impact.
Federal agencies face hard choices on how to best allocate resources across offices and programs to accelerate the deployment of innovative technologies up to and including demonstration and at-scale deployment. Improving operational processes is one way to improve resource allocations while advancing innovation. For recommendations specific to federal demonstration programs, read more here.
Federal agencies must modernize existing processes to help industry drive innovation, increasing American competitiveness in a fast-changing global market.
1 DOT is already using one application for multiple funding programs. It has guidance for staff to apply the one application process to TrAMS projects, and recently used one application process for three funding programs just last year. States are also testing this approach. Massachusetts recently set up a process for communities to access 12 grant programs through one application. These examples could be a starting point for piloting a single application process at other federal agencies.
2 Grant reviewers could perform an initial screen of applications for eligibility to different funding programs. If a project does not receive funding from one program, it may be eligible for other opportunities; similarly, grant reviewers could determine if more than one funding stream could be applied to a project. Reviewers could check off reviews already completed for applications, where basic project requirements are met, so that subsequent program reviewers can focus on program-specific funding decisions. This would streamline the review process for agencies.
