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US funds give lift to Mass. clean tech

Grants called validation of alternative energy

By Erin Ailworth
Globe Staff / February 11, 2011

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More than a year ago, the Department of Energy began spreading millions of dollars to promising alternative energy companies across the country, with the idea they would use that support to help attract private capital. Six firms have done it best, according to Energy Secretary Steven Chu, and five are from Massachusetts.

The recognition, federal and state officials said, is proof of the strength of Massachusetts’ clean energy sector because investors wouldn’t risk their money unless they believed in the future of the companies and the industry.

Nearly $20 million in federal funds went to these local companies, which then raised nearly five times as much — $95 million — from private investors. The money has helped create several dozen jobs, expand offices, and lay the groundwork for new manufacturing as the companies begin testing technologies on ever-larger scales.

“Massachusetts has a strong ecosystem of [research and development] and technology, so it’s congratulations to Massachusetts,’’ said Arun Majumdar, director of the energy department’s Advanced Research Projects Agency-Energy, which distributed the funding.

So far, $363 million has been handed out to 121 projects nationwide.

The companies recognized by Chu were 1366 Technologies of Lexington, which makes silicon wafers for solar panels; 24M Technologies of Cambridge, developing high-performance batteries for electric vehicles; FloDesign Wind Turbine Corp. of Wilbraham; Sun Catalytix of Cambridge, which makes energy from sunlight and water; and General Compression Inc. of Newton. The only non-Massachusetts company was battery maker Envia Systems of Hayward, Calif.

Frank van Mierlo, president of 1366 Technologies, said the $4 million his company received from the Energy Department was instrumental in building a pilot plant to showcase 1366’s streamlined wafer-making process.

Some analysts say the process could be 80 percent less costly than current techniques and make solar power competitive with traditional fossil fuels. That helped attract an additional $33 million from investors — money that will be used to build a 45,000-square-foot demonstration plant, van Mierlo said.

That facility could create up to 70 jobs, van Mierlo said, and will allow the company to test its product on a wider scale while refining its manufacturing process, and to show the technology to more people.

He hopes to break ground on the plant this year, but hasn’t yet decided on the location.

“It has just made such a big difference at our venture,’’ van Mierlo said of the government support. “It allowed us to start this project, which is really the core of our company.’’

FloDesign, meanwhile, used its $8.3 million government grant to recruit an executive team and more than double its staff, to 50 from 20 employees, and raise $27 million from investors.

State energy officials point to the federal and private support as a sign that Massachusetts is building one of nation’s leading clean tech sectors. The sector now employs more than 10,100 at 470 firms.

“It’s validation at the highest level,’’ said Richard K. Sullivan Jr., secretary of the state’s Executive Office of Energy and Environmental Affairs.

Patrick Cloney, executive director of the Massachusetts Clean Energy Center, which distributes financial aid to the local alternative energy industry, said the government’s backing provides these start-ups with more than financial support. It gives their ideas credibility, which then makes it easier to attract investors.

“It’s worth it’s weight in marketing,’’ he said.

General Compression president David Marcus said the $750,000 his Newton firm received was like a “stamp of approval.’’

The company soon after attracted $12 million from investors to further develop a compressor that can store excess wind-generated energy for later use.

“Investors and customers are always sort of looking at each other trying to decide, ‘Is this a good idea?’ ’’ Marcus said. “Part of getting that government funding was taking that nagging doubt down.’’

Erin Ailworth can be reached at eailworth@globe.com.