Free Money for Going Green: Environmental Subsidies and Grants

When it comes to running a business, there isn’t much that falls under the category of “free money.” When most business owners think of expanding their operations, they think loans, private-placement memorandums or other sources that need to be repaid. But if you operate a business in the right industry, you might qualify for a government grant. 

Various government agencies offer grants to “green” businesses that work in a variety of fields, from agriculture to energy, to even software development. Each grant is meant to solve an ongoing issue through cost-effective measures that have a minimal detriment to the environment, also known as “going green.” Because this is just a basic overview, it’s best to visit the websites for each program to see if your business qualifies and if it can fulfill the terms of the grant.

Rural Energy for America Program 

Under the U.S. Department of Agriculture (USDA), the Rural Energy for America Program (REAP) gives grants to farmers, ranchers and other agricultural producers for the purchase and installation of renewable energy technologies (e.g. renewable biomass, biofuels, geothermal, hydrogen, solar, etc.). REAP grants are designed to help individual farmers, producers and small agricultural businesses reduce their energy costs and consumption to match national energy needs and reduction targets. The reward can be applied to make improvements in energy efficiency, which range from conducting energy audits and feasibility studies, to purchasing agricultural tillage equipment and vehicles, or even funding permit and license fees. 

How Does It Work?

Rewards can be used to purchase renewable-energy machinery and equipment, to improve real estate through construction or through the purchase of building materials, or to subsidize the cost of professionals’ fees and permits, and the cost of research and business planning. Grant amounts range from as low as $1,500 to as high as $250,000. However, REAP grants can only be used to finance up to 25% of the project’s total cost. 

Who Qualifies?

Special preference is given to small agricultural businesses with less than 15 employees and annual revenues under $1 million. REAP applicants must meet the criteria outlined in the Small Business Administration’s (SBA’s) definition of a small business. Additionally, grant applicants must prove that at least 51% or more of their gross income for the past three years is derived from a rural area. 

How to Apply 

You can apply online by using the Simplified Grant Application Template. Additional information is available via REAP’s Notice of Funding Availability for the current fiscal year, which is published on the federal register.

Small Business Innovation Research Program 

The National Science Foundation’s Small Business for Innovation Research (SBIR)/Small Business Technology Transfer (STTR) grant program provides funding for early-stage research and development technologies that impact biological, chemical, environmental, smart health and similar industries. More specifically, SBIR/STTR funds transformational technologies, which are defined as products or processes with high technical risk and with the potential to make a significant societal and/or economic impact. 

How Does It Work? 

Examples of eligible SBIR projects include the conversion of renewable raw materials to commercial products and the development of sustainable packaging, among others. Recipients are eligible to receive up to $900,000 over the course of 30 months for Phase I and Phase II projects. 

During Phase I of the program, grantees receive $150,000 over six months to conduct a feasibility study to demonstrate whether the company’s project has adequate commercial and technical merit to progress to Phase II. During the second phase, grantees receive $750,000 over two years to develop a product prototype. Based on their Merit Review process, the NSF provides over $500,000 in supplemental grants as well as access to industry experts to help grantees commercially launch their product. 

Who Qualifies? 

Small businesses and startups that are looking to fund research and development in one of the NSF’s listed technologies are eligible to apply; in addition to other requirements, these company must not have more than 500 employees. Click here for more information on eligibility requirements.  

How to Apply 

NSF offers a wealth of resources on its website for interested applicants. Before submitting a proposal online, the NSF recommends that applicants refer to the Phase I Solicitation Guide. You can also attend a live webinar for answers to frequently asked questions. The NSF also advises Phase I grantees moving to Phase II of the program to apply within one to seven months of their Phase I award’s expiration date.

Assistance to High Energy Cost Rural Communities Program 

Sponsored by the U.S. Department of Agriculture’s Rural Utilities Services (RUS), the High Energy Cost Grant is geared towards assisting rural communities that incur energy costs exceeding 275% of the national average. 

How Does It Work? 

Organizations can use the program’s High Energy Cost Grant for purchasing, building, implementing and improving renewable-energy projects. Grant funds can also be directed toward energy conservation in affected rural communities. However, funding cannot be used for the payment of utility bills, fuel costs, equipment, building materials, operating and maintenance costs, or real estate purchases that are unrelated to the improvement of the community’s energy infrastructure. 

Who Qualifies?

Individuals and small businesses, including sole proprietorships, for-profit organizations, corporations, cooperatives and trusts, are eligible to apply for the grant.

How to Apply 

Individuals and companies can submit an application electronically via or send a paper application to the following address: 

Rural Utilities Service
Attention: High Energy Cost Grant Program
United States Department of Agriculture
1400 Independence Avenue, SW, Stop 1560, Room 5165
Washington, D.C., 20250

SBIR E-Learning for HAZMAT and Emergency Response Program 

The Small Business Innovation Research (SBIR) program offers the E-Learning for Hazardous Materials (HAZMAT) and Emergency Response Grant to qualifying organizations that spearhead advanced-technology-training (ATT) products for skilled professionals, emergency responders and other workers in HAZMAT sectors. Grant money is primarily used to fund tools that aid in the research of acute and long-term health effects following major disasters, as well as those that contribute the emergency preparedness of communities and citizens.

How Does It Work?

According to the SBIR, ATT products constitute e-learning technologies that help instructors develop and deliver classroom training on health and safety in both physical and remote environments. ATT products can also be e-learning tools that facilitate individual or group learning for students using mobile and desktop computer applications, and electronic products that support environmental health research in emergency preparedness as a result of major disasters. 

The National Institute of Environmental Health Sciences (NIEHS) committed $800,000 to fund four to eight awards during fiscal year 2015. Grantees are given up to $100,000 for Phase I projects (one-year duration) and up to $200,000 for Phase II projects (two-year duration). 

Who Qualifies? 

Organizations must qualify as a small business concern according to the SBA definition. Corporations, cooperatives, sole proprietorships, joint ventures, limited liability companies (LLCs), professional associations and trusts are all eligible to apply. 

How to Apply 

SBIR encourages applicants to follow instructions according to the grant’s application guide and Section IV: Application and Submission Information