USDA REAP: The Best Small Business Energy Grant That Flies Under the Radar
The USDA Rural Energy for America Program (REAP) is the single most accessible federal energy grant for small businesses, yet most owners have never heard of it. REAP covers solar, wind, geothermal, biomass, anaerobic digesters, small hydropower, and energy efficiency improvements. The grant range is $1,500 to $500,000, covering up to 40 percent of project costs. A loan guarantee option is available for the remaining 60 percent, which is unique among energy programs. Combined, REAP can finance up to 75 percent of your total project cost. Who qualifies: Agricultural producers with at least 50 percent of gross income from agriculture, and small businesses in rural areas as defined by the 2010 Census. "Rural" means any area outside an urbanized area of more than 50,000 people. This covers far more businesses than people expect, including businesses in towns of 20,000-50,000 people. What counts: Any commercially available, proven technology. Solar panels, wind turbines, ground source heat pumps, energy-efficient lighting, HVAC upgrades, insulation, and LED systems all qualify. The technology must be technically feasible and reduce the energy consumption or generate renewable energy. Application window: REAP has multiple funding cycles. USDA Rural Development typically announces funding opportunities in September and January. Applications go through your local USDA Rural Development State Office. Check grants.gov for open FOAs under CFDA 10.868. Typical award in 2025: The average REAP grant was approximately $59,000, with solar installations being the most common project. The program has funded over 25,000 projects since 2009, totaling more than $2 billion in assistance. One practical note: REAP grants require a third-party technical report for requests over $200,000. For smaller projects, an energy assessment from a certified energy auditor suffices. Most solar contractors in rural areas are familiar with REAP and can help with the paperwork.
State Energy Programs: Where Nonprofits Find the Most Accessible Funding
Federal programs are competitive and often oriented toward larger organizations. State energy offices run dozens of programs specifically designed for nonprofits and community organizations. California: The LA County TECH Grant (Round 2) offers up to $700,000 exclusively to 501(c)(3) nonprofits in Los Angeles County. The program funds community outreach and education about clean energy technologies, specifically around building decarbonization and electrification. Applications close March 31, 2026. Contact: [email protected]. The California Energy Commission also runs GFO-25-602 (closes March 25), GFO-25-604 (April 22), and GFO-25-304 for air quality interventions (April 30). Illinois: The Illinois Climate Pollution Reduction Grants program offers up to $200,000 for Small Utility Clean Energy Planning (Third Round), targeting municipal and cooperative electric utilities. Applications close April 17, 2026, through the AmpliFund portal. New York: NYSERDA runs multiple programs relevant to nonprofits. The FlexTech program provides cost-shared technical assistance for energy assessments. Affordable Solar and Storage Predevelopment offers up to $200,000 per award. EmPower+ provides free energy upgrades for low-income households served by nonprofits. The Commercial and Industrial Carbon Challenge offers $500,000 to $5 million per project. Colorado: Automated Permit Processing for Solar Grant offers up to $1 million specifically for Colorado government agencies and local government bodies, including utilities. Nationwide: Energy Efficiency and Conservation Block Grants (EECBG), funded under IIJA, flow through state and local governments and often make sub-awards to nonprofits doing energy work in communities. Check with your state energy office or local government to see if sub-grants are available. The Weatherization Assistance Program, funded at $329 million for FY2026, works through a network of local agencies, many of which are nonprofits. If your organization provides services to low-income households, you may be an eligible weatherization agency. Search Funding Landscape to see current open grants in your state filtered by applicant type.
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DOE Programs for Small Businesses: SBIR/STTR and ARPA-E
The Department of Energy runs two programs that are exclusively for small businesses by law. DOE SBIR/STTR has a statutory annual budget exceeding $300 million, distributed as approximately 400 Phase I awards and 200 Phase II awards per year. Phase I provides $200,000 over nine months for feasibility research. Phase II provides $1.1 million over two years for prototype development. Phase I winners have a strong competitive advantage for Phase II, and Phase III is commercial or follow-on funding. DOE SBIR operates under its own authority, separate from the SBA-administered program that lapsed in late 2024. DOE SBIR is fully active. FY2026 solicitation windows run approximately May through August (early funding cycle) and September through January (Phase I). Topics cover over 60 technical areas across DOE's offices: Office of Science, ARPA-E, Energy Efficiency (CMEI), Fossil Energy, Nuclear Energy, and others. Small businesses eligible for DOE SBIR must have fewer than 500 employees, be more than 50 percent owned by U.S. citizens or permanent residents, and have their principal place of business in the United States. The tech must have commercial potential beyond the grant period. ARPA-E SPARKS is the always-open early-stage opportunity. Awards up to $500,000 are available for genuinely transformative energy technology ideas that are too early for traditional funding. There is no deadline. ARPA-E also runs topic-specific programs: SUPERHOT (geothermal, $30 million total, applications due March 5, 2026), ROCKS (critical minerals sensing, $40 million), and MAGNITO (magnetic materials, $20 million). ENERGYWERX iCRS-D offers up to $4 million through a DOE Partnership Intermediary Agreement for innovations in grid interconnection cost reduction. Applications close April 16, 2026. Eligible entities are domestic organizations; investor-owned utilities must provide 50 percent cost share. For established small businesses in manufacturing or industrial settings, the DOE Better Buildings program runs a separate track of technical assistance and financing programs. The Industrial Assessment Centers at universities provide free energy assessments to small and medium manufacturers within 150 miles of a participating university.
Foundation Grants for Nonprofit Energy Projects
Private foundations are a major and often underutilized source for nonprofits doing energy work, particularly community solar, weatherization, energy education, and environmental justice work. Bloomberg Philanthropies has committed $500 million to clean energy transition efforts globally. Programs include Beyond Carbon and America Is All In. Nonprofit applicants working on policy, clean energy deployment, or community organizing around climate should monitor bloombergphilanthropies.org. The Bezos Earth Fund has committed $10 billion over ten years. Areas of focus include accelerating clean energy transition, nature-based solutions, and environmental justice. Grant amounts range from $1 million to over $50 million. Applications are typically by invitation, but the fund publishes its areas of focus. Energy Foundation provides operational support grants to U.S. nonprofits working on clean energy policy and advocacy. It is primarily a policy funder. If your work involves changing energy policy at the state or local level, this is a natural fit. Rocky Mountain Institute (RMI) runs a grants program for community-focused energy transition work. Their Community Energy program focuses on rural and disadvantaged communities. State Clean Energy Funds, often called Green Banks or Clean Energy Finance Authorities, exist in over 20 states and provide low-interest loans, technical assistance, and some grant funding to nonprofits and community organizations doing energy work. California's CPCFA, Connecticut's CEFIA, New York's NYSERDA, and Massachusetts' MassCEC all have relevant programs. These are frequently overlooked because they operate at the state level rather than through federal portals. Search Funding Landscape to find foundation and state fund opportunities alongside federal programs.
IRA Home Rebate Programs: What Nonprofits Can Access for Clients
The IRA home energy rebate programs are not direct grants to nonprofits, but nonprofits serving low-income households can facilitate access for their clients. The HOMES program offers up to $8,000 per household for whole-home retrofits that achieve 35 percent or more energy savings. Households at 80 percent of area median income or below can receive 80 percent of project costs. Higher-income households can receive 50 percent. The HEAR program (previously HEEHRA) offers point-of-sale rebates up to $14,000 per household: $8,000 for a heat pump, $1,750 for a heat pump water heater, $840 for an electric stove or cooktop, $1,600 for insulation and air sealing, $2,500 for electrical panel upgrades, and $4,000 for wiring. These are for lower-income households only (at or below 150 percent of area median income). Rollout is state-by-state. California is fully reserved in Central and Southern regions. Colorado launched in late 2025. Connecticut and Minnesota plan 2026 launches. Many states are still finalizing contractor qualification programs. Nonprofits serving low-income populations can act as navigators, helping clients understand eligibility and connecting them with qualified contractors. Several states have specifically funded community organizations to do this outreach work. One important nuance: these programs cannot be combined with the 25D residential solar tax credit for the same project, but they can be combined with utility rebate programs.
How to Find Energy Grants in Your State
The most productive approach is layered: federal programs through grants.gov, state programs through your state energy office, and foundation programs through filtered search. For federal programs: Search grants.gov with CFDA code 81 (Department of Energy) filtered by open status. For USDA programs, use CFDA 10 (USDA). The DOE CMEI Exchange (eere-exchange.energy.gov) lists open DOE funding opportunities. For state programs: Your state energy office maintains its own list of programs. State energy office websites are inconsistent, but most have a grants or funding section. Alternatively, NASEO (National Association of State Energy Officials) maintains a directory at naseo.org. Some states use centralized portals: California uses grants.ca.gov, Illinois uses omb.illinois.gov/GMS, New York uses nyserda.ny.gov. For community energy and low-income programs: Check your state's public utility commission. IRA weatherization and home rebate programs typically run through state energy offices or state housing finance agencies. For small business manufacturing: The DOE Industrial Assessment Centers are a free resource regardless of grant availability. If you qualify for free energy assessment services, use them first to identify your best projects before applying for grants. Search Funding Landscape to compare open federal, state, and foundation opportunities side by side. You can filter by applicant type to see what is specifically available to nonprofits or small businesses in your area.