Understanding Technology Readiness Level (TRL): A Guide for Innovators, Investors, and Infrastructure Stakeholders
- Bharatia Academy
- Aug 13
- 6 min read
In an era where innovation is critical to solving some of the world’s most pressing challenges—climate change, sustainable development, health, and mobility—evaluating the maturity of a new technology is crucial. For technology developers, especially in the hardware and engineering space, understanding how close their solution is to market-readiness is not just a matter of technical pride—it is a core determinant of funding, partnerships, and scalability. This is where the Technology Readiness Level (TRL) framework comes in.
What is TRL?
Technology Readiness Level (TRL) is a standardized scale used to assess the maturity of a particular technology. Originally developed by NASA in the 1970s to help assess the readiness of new technologies for space missions, the concept has since been adopted across sectors globally—from energy and defence to agriculture, health, and advanced manufacturing.
The TRL system scores a technology on a scale from 1 to 9, where TRL 1 represents the earliest stage of basic research, and TRL 9 represents a fully mature and operational technology deployed in real-world environments.
The 9 Levels of TRL Explained
Let’s explore each level in detail, especially from the lens of a hardware-based engineering or infrastructure technology firm:
TRL 1 – Basic Principles Observed
This is the concept stage. Scientists identify fundamental principles underlying a new idea. There are no practical applications yet—only theoretical models or early-stage curiosity-driven science.
Example: Identifying that a certain bacteria strain produces hydrogen under specific conditions.
TRL 2 – Technology Concept Formulated
Here, the idea transitions into a hypothesis, with initial scientific studies or technical research validating its feasibility. The path to application starts to emerge.
Example: Proposing a bioreactor concept that can use the hydrogen-producing bacteria to create energy.
TRL 3 – Experimental Proof of Concept
This level involves validation at a small scale, typically in a laboratory. The technology’s components are integrated for the first time to demonstrate that they work together as expected.
Example: A working tabletop prototype of the bioreactor that produces measurable hydrogen in controlled lab conditions.
TRL 4 – Technology Validated in Lab
At this stage, the technology is shown to work under more rigorous conditions, usually at bench scale. The prototype might incorporate more realistic systems and stress testing.
Example: A bench-scale model of the bioreactor operating continuously for several days, validating performance consistency.
TRL 5 – Technology Validated in Relevant Environment
The technology undergoes pilot testing, often outside the lab but in a controlled, relevant environment that mimics real-world conditions.
Example: Installing the bioreactor in a university test site, running it with organic waste from a cafeteria.
TRL 6 – System/Subsystem Model Demonstration in Operational Environment
This marks the transition from pilot to pre-commercial scale. The system is tested at near-commercial scale or in partial integration with existing infrastructure.
Example: Operating the bioreactor at a small municipal waste treatment facility, handling actual waste streams.
TRL 7 – System Prototype Demonstration in Operational Environment (Inactive Commissioning)
The technology or system is now being commissioned at a full or near-full scale site, but not yet active. All components are installed and undergoing calibration and testing.
Example: The bioreactor is installed at a waste plant, but is not yet running at full capacity.
TRL 8 – Actual System Completed and Qualified Through Test and Demonstration (Active Commissioning)
This is the active commissioning phase. The system is live, producing outputs, undergoing fine-tuning, and generating operational data.
Example: Bioreactor in full operation, hydrogen output measured, bugs resolved, and team training underway.
TRL 9 – Actual System Proven Through Successful Operation
The technology is now a mature commercial product. It operates reliably at one or more sites. Investors, lenders, and customers see it as low risk.
Example: Bioreactor systems running successfully at three city-level facilities with multi-year performance history.
Why TRL Scoring Matters for Technology Companies
1. A Score that Tells a Story
A TRL score is not just a number—it tells the story of how far your innovation has come. For stakeholders unfamiliar with the technology itself, a TRL score provides a simple, universal language to communicate technical maturity.
2. Investor Confidence
Venture capitalists, impact investors, and strategic partners routinely assess TRL scores when evaluating funding requests. A TRL 3 or 4 may attract early-stage risk capital, while TRL 6 and beyond may be suitable for infrastructure investors and corporate buyers.
Think of it as your technology credit score—a trusted signal of how close your innovation is to real-world deployment.
3. Quantifying Risk and Market Entry Timelines
Investors and partners need to assess not just the promise of the technology, but also the risk and time to market. TRL scores help quantify the effort, time, and capital required to move from concept to commercialisation.
For example:
TRL 2 to 5 might take 2–5 years and significant R&D investment.
TRL 6 to 9 may require pilots, field trials, certification, and scale-up capital.
The clearer the score, the easier it is to co-develop financing structures that match the risk-reward profile.
4. Decision-Making for Lenders
In sectors like renewable energy, waste treatment, and urban infrastructure, debt capital plays a vital role. But lenders are risk-averse, and technologies that are not fully mature do not qualify for project finance.
Most banks and NBFCs will not lend to any project unless:
The technology has achieved TRL 9,
Has operated for at least 3 years, and
Is generating stable, predictable cash flows.
Without TRL-based clarity, lenders may hesitate—even if the technology works.
5. Avoiding the “Valley of Death”
Many innovations stall between TRL 5 and TRL 7—the stage where R&D funding has dried up but commercial finance is not yet accessible. This “valley of death” is where startups die, not because of a lack of innovation, but because of unclear funding pathways and technical validation gaps.
By tracking and reporting TRL progression:
Companies can apply for grant funding at TRL 3–5,
Bring in blended capital or concessional loans at TRL 6–7,
And prepare for commercial scale-up finance at TRL 8–9.
6. A Tool for Communication and Strategic Planning
TRL scoring helps internal teams and external stakeholders:
Align on expectations
Sequence product roadmap milestones
Set realistic go-to-market timelines
Plan capex cycles and risk management
It becomes a strategic tool for the leadership team to assess portfolio maturity and capital needs.
Best Practices for Technology Companies
Get Scored Regularly Just like financial audits or ISO certifications, regular TRL scoring ensures clarity and discipline. It also builds trust with external partners. Scoring should be done:
At every major R&D or pilot milestone
Before fundraising
Prior to bidding for projects or tenders
Use Credible Evaluators
Engage reputed independent entities or sector-specific experts who understand both engineering and market-readiness aspects. Government-recognised innovation councils, technical universities, or third-party labs are credible scorers.
Document Everything Maintain clear, auditable documentation of progress—prototypes, pilot reports, test data, certifications, partnerships, and contracts. These support your TRL score and provide confidence to evaluators.
Integrate TRL into your Investor Deck
A dedicated slide showing your TRL journey, with future milestones mapped out, adds rigour to your pitch and clarifies how funding will be used.
Pair TRL with Commercial Readiness Level (CRL)
While TRL tells you how mature the technology is, CRL (a similar 1-9 scale) tells you how mature the business side is—IP strategy, go-to-market plans, regulatory approvals, and customer pipelines. Together, they offer a holistic picture.
Conclusion
Technology Readiness Level (TRL) is far more than a bureaucratic scoring system—it is a strategic lens through which innovators, investors, and lenders can assess the commercial journey of a new solution. In a capital-scarce environment, especially for climate and infrastructure technology, TRL is a currency of trust.
Hardware-based technology companies must embrace it—not just as a score but as a narrative tool, a funding enabler, and a growth compass.
As markets move from hype to discipline, TRL will increasingly determine who gets funded, who scales, and who survives.
Useful links / Engage with us:
Technology Readiness Level (TRL) and Commercialisation Readiness Level (CRL) scoring.
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ETV / VIPERS process of technology commercialisation
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