View From The Field: New York City Accelerator for a Clean and Renewable Economy

By Chris Shreve

In a bright, high-ceilinged loft in lower Manhattan lives the New York City Accelerator for a Clean and Renewable Economy (NYC ACRE), an incubator for clean technology and renewable energy start-ups.

The director of NYC ACRE, Micah Kotch, fits the part: busy but casual, and full of talking points. “We’re big believers in technology-based economic development,” he said from an orange-colored armchair in the reception area. “We’re focused on this opportunity we refer to as ‘clean web,’ or energy infotech.”

All of NYC ACRE’s companies focus on some aspect of energy technology, from financial services to social media to education, and more. “This sector diversity is a strength,” said Kotch, “just like New York’s diversity is a strength.”

NYC ACRE supports its dozen or so companies in a variety of ways. It provides access to support services such as business plan writing, legal and tax services, and sales and marketing assistance. It also facilitates access to research facilities, and connects companies with a local network of experts, mentors, and (ideally) customers. “If you can provide them with some of the key services that they need to grow,” said Kotch, “then I think it reduces some of the friction that’s inherent in starting up.”

Everyone I spoke to at NYC ACRE, from a manufacturer of solar mounting systems to an economic consultant, praised the open, collaborative environment. Everyone liked the free paper, too. “If you go to Kinko’s and print out four copies of a deck, it’s a hundred and twenty dollars,” said a partner in a social media startup. “You get the full spectrum here. From getting set up to meeting the mayor.” (Mike Bloomberg had toured the space a few days before my visit.)

NYC ACRE is an initiative of the Polytechnic Institute of NYU and is seeded by a four-year, $1.5 million grant from the New York State Energy and Research Development Authority (NYSERDA), which has funded six clean energy business incubators around New York state. Since the program’s inception, partner companies (many of which have moved on to self-sufficiency) have brought a total of 38 new products to market.

For Kotch, the need for incubators in New York is acute. “We buy green, but we don’t make green,” he said, meaning that New York City is a large consumer of green technology and products, but the companies that supply those products are, for the most part, located in other states. “We’re a consumer of smart grid, of electric vehicle technology, but that innovation, for the most part, is not happening here.”

The retrofit of the Empire State Building in 2011 offers a striking example of New York’s shortcomings in the field. A California company, Serious Materials, was contracted to upgrade the skyscraper’s 6,500 windows.

“We spend something like a billion dollars on our energy market in New York City,” said Kotch. “A very small percentage is going to in-state firms.” To change that, he thinks companies need to be nurtured throughout their growth.

To promote early-stage growth, he said a seed fund “makes a ton of sense,” especially because private sector funding is scarce. “New York City has a ton of angel activity in digital media,” he said, “but New York City angels don’t understand clean tech.” He mentioned NYSERDA as a possible candidate to jump-start the sector with a seed fund, and ticked off successful entities in other states: Connecticut Innovations, the New England Clean Energy Council, the New Jersey Green Infrastructure Assessment.

Once companies have found initial success, New York could do more to keep them here, too. One problem is that New York lacks a “center of excellence” to support clean technology research and to show off new technology. Boston, for example, built a center for algae biofuels right on its bay.

New York City has the highest electricity prices in the country. It produces more municipal solid waste than any other city. It has more than a million buildings. “What makes sense in New York,” said Kotch, “is something on electric vehicles, waste to energy, cogen, energy efficiency in buildings.

“If you had a world-class facility, a company’s not going to want to leave here.”