Scientific discovery has the potential to fundamentally transform society, but only if inventions made in the lab can grow, scale, and reach the real world.
Despite best intentions and best efforts, that path for bringing a new discovery from the lab bench to real-world impact is long and harrowing. Technologies must be tested at a larger scale, customers and markets must see value in the invention, data must be validated, teams and partnerships built, and funding secured – all with the support of a regulatory and policy ecosystem that enables this process.
The U.S. Department of Energy’s Office of Technology Commercialization (OTC) is a critical vehicle for building a department-wide innovation framework. It has a cross-cutting, technology-agnostic mandate: help DOE’s innovations clear the “valleys of death” between the lab bench and commercial deployment. Today, the office achieves this through an expansive portfolio, including small business innovation programs, the Lab Embedded Entrepreneurship Program, and energy incubators.
However, its funding is woefully inadequate – and the House FY27 Energy and Water bill currently being considered threatens to lock in those cuts. The Senate Appropriations Committee now has the opportunity to set a budget that appropriately covers the critical innovation programs OTC leads.
OTC as a Cross-Cutting Hub at DOE
- Adoption Readiness Levels (ARLs) and a common innovation framework: ARLs assess technology commercialization readiness across four risk dimensions: value proposition, resource maturity, market acceptance, and license to operate. They improve upon the traditionally used Technology Readiness Levels (TRLs), which focus narrowly on technical maturity. By working with program offices to map their portfolios against ARL assessments, OTC has helped create a shared language that connects scientific progress to market realities.
- Partnership Intermediary Agreements, flexible funding mechanisms, and program design: One of OTC’s less visible but high-value functions is that the office serves as DOE’s internal hub for innovative funding and partnership mechanisms. Federal grant and contract structures are powerful but rigid – not always suited to the fast-moving, relationship-intensive work of technology commercialization. OTC has taken the lead in coordinating DOE’s use of Partnership Intermediary Agreements (PIAs) and vouchers, as well as supporting the new Foundation for Energy Security and Innovation (FESI), DOE’s official nonprofit partner. By building internal expertise in these mechanisms and running working groups that span program offices, OTC ensures that the full toolkit of federal commercialization tools is available and used consistently across DOE.
- Partnering with the national labs: For entrepreneurs and small businesses, accessing the national laboratories can feel like navigating a bureaucratic maze. The Lab Partnering Service was conceived as a “front door” to help the private sector understand and form partnerships with the national labs.
OTC’s Growing Portfolio: LEEP, SBIR, and More
- The Lab Embedded Entrepreneurship Program (LEEP): LEEP is one of DOE’s most successful and high-leverage programs. It places entrepreneurs-in-residence at national laboratories, giving them direct access to lab facilities, scientists, and IP to help develop commercialization pathways for lab-based technologies. Since its inception roughly a decade ago, LEEP has catalyzed more than $4 billion in private follow-on funding.
- LEEP has transitioned from oversight by the Office of Critical Minerals and Energy Innovation (CMEI) to OTC and has expanded to cover a broader range of technology priorities across the department. This expansion is an opportunity, but it requires real investment and operational capacity.
- SBIR/STTR, DOE’s Engine for Small Business Innovation: The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs represent one of the federal government’s most important vehicles for funding early-stage technology development by small businesses.
- Administration of the DOE SBIR/STTR program has recently moved to OTC. This is a significant new responsibility. Previously, the Office of Science administered SBIR using its substantial program direction budget. OTC has no comparable baseline funding to cover administration costs. Without dedicated appropriations, OTC faces a difficult choice: take a cut of the SBIR award pool itself to cover management costs – directly reducing funds available for small businesses – or let the program suffer from inadequate oversight.
- SBIR is often the first opportunity a start-up or small company can leverage to secure DOE funding. Having that experience be positive, smooth, and beneficial for those companies only helps to accelerate entrepreneurship and technology development. The program’s move to OTC provides an opportunity to streamline, revamp, and expand SBIR opportunities across energy technology areas, unlocking increased capability to support start-ups and small businesses across the sector.
- National Lab Vouchers and Energy Incubators: OTC also oversees the National Laboratory Vouchers program, which connects private sector companies with national lab capabilities through in-kind vouchers. Prior voucher efforts funded through the 2021 Infrastructure Investment and Jobs Act were significantly oversubscribed, demonstrating the private sector’s appetite for lab partnerships.
- Through the National Energy Incubator Program (formerly the EPIC Prize), OTC supports regional clean energy incubators that directly serve the needs of next-generation startups. The track record is impressive: EPIC’s 10 round one incubators, on a total federal investment of approximately $9.5 million, supported 230 companies that together generated $33 million in annual revenue, secured $138 million in follow-on funding, and created 1,800 jobs across 32 states. Few federal programs can match that leverage ratio.
A Critical Funding Gap
For OTC’s expanding portfolio and demonstrated results, its funding is woefully inadequate. The House FY27 Energy and Water bill threatens to lock in those cuts.
OTC Total (incl. FESI)
| FY26 Enacted | FY27 PBR | FY27 Re-Energizing America Recommendation | FY27 House E&W Bill | FY27 Senate E&W Bill |
|---|---|---|---|---|
| $13M ($3M for FESI) | $26.5M ($1M for FESI) | $26M | $10M (without FESI) | TBD |
The House bill keeps OTC at $10 million – the same level as FY26. $10 million cannot sufficiently cover SBIR administration (which is estimated at $12.3 million annually), let alone also cover LEEP, vouchers, PIAs, and program direction.
Clean Tomorrow’s Re-Energizing America initiative recommends Congress appropriate $26 million for OTC in FY27. Taking into account the more robust responsibilities recently given to OTC, a more comprehensive request of $83.5 million would fund the complete portfolio of programs at appropriate levels, including $25 million each for LEEP and the Vouchers program, $10 million for the National Energy Incubator Program, and dedicated program direction for SBIR administration.
Congress Has an Opportunity to Act
Fortunately, the FY27 House Energy and Water bill is not the final word on funding for OTC. Congress still needs to pass funding bills for FY27, and the Senate Appropriations Committee has the opportunity to right-size the office’s budget and send a clear signal that Congress is serious about translating federal RD&D into commercial outcomes.
There also remains important work to be done in reauthorizing the office. Congress should codify OTC’s name, provide open-topic flexibility for SBIR across all DOE technology offices, and ensure that the authorizing statute reflects OTC’s current responsibilities.
The Bottom Line
OTC is a small office in DOE that plays an outsized role in connecting disparate DOE offices with the national labs, researchers, small businesses and entrepreneurs at the heart of the U.S. energy innovation ecosystem. Its technology-neutral, cross-department approach not only enables the rest of DOE to be more coordinated and nimble but also meets innovators where they are to make sure that what gets invented in the lab has a fighting chance of reaching the market. Now is the time to support that effort and enable OTC’s important mission.
Additional Re-Energizing America Resources
