US small businesses have been left largely unimpressed by a new Department of Energy initiative that has seen millions of dollars in stimulus package funding for earmarked for small businesses prepared to tackle environmental problems.

Energy Secretary Stephen Chu this week announced $37 million in grant money, to be made available under the Department's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) initiatives.

The funds will be made available to small businesses researching solutions in clean technologies, such as power plant cooling, advanced solar technologies, and smart controllers for smart grid applications.

Over $8 million in funds will be made available in the first phase of the initiative, the submission deadline for which is September 4. Each successful applicant could receive grants of up to $150,000 to help demonstrate the commercial viability of their technology.

However, small business groups highly critical of the initiative, arguing that even for smaller firms the sums on offer were unlikely to make a significant difference.

Lloyd Chapman, founder of the American Small Business League, argued that the new funds were little more than a drop in the ocean, pointing out that small businesses have so far received roughly 0.5 per cent of the $7.8 trillion made available by the American Recovery and Reinvestment Act in February.

"Half a percent seems staggeringly low to me, and this Department of Energy money is what I would call statistically insignificant," he said. "It's a public relations ploy."

Chapman added that there was a strong case for smaller businesses to receive a larger chunk of the DoE's stimulus funding, pointing out that small businesses are responsible for 97 per cent of new jobs and 50 per cent of gross domestic product in the US.