Energy Efficiency Grants for Small Businesses

If you’re a small business facing rising utility bills, you’re not alone. From outdated HVAC systems to inefficient lighting and poor insulation, energy waste adds up fast and eats into your bottom line every month.

What if you could get part of the cost of those critical upgrades back?

With the USDA’s Rural Energy for America Program (REAP), you could qualify for a grant that covers up to 25% of your energy efficiency project costs (7 CFR §4280.122(a)(3)). Under the rule USDA published on October 1, 2026, the grant comes after the work is done. Your project must have been completed between 12 and 24 months before you apply (7 CFR §4280.122(a)(1)). Whether you’re looking to replace equipment, modernize your facility, or reduce long-term operating expenses, REAP funding can help make it happen.

What Is the USDA REAP Energy Efficiency Grant?

The USDA REAP Grant is a federal program that supports rural small businesses and agricultural producers investing in energy efficiency improvements or renewable energy systems (7 CFR §4280.120(a)(4)). The goal is simple: reduce energy consumption, lower utility costs, and make American businesses more resilient.

An energy efficiency improvement means improving an existing building or system, or improving or replacing equipment you own, so that it uses less energy each year (7 CFR §4280.104).

What Types of Projects Qualify?

REAP-funded energy efficiency projects often include:

• High-efficiency HVAC systems

• LED lighting upgrades

• Improved insulation and windows

• Automated energy controls

• Refrigeration and food processing equipment

These upgrades not only save energy, they also increase comfort, improve operations, and deliver strong return on investment (ROI).

Efficiency improvements to vehicles are not eligible (7 CFR §4280.122(b)(14)), and vehicles are not an allowable cost (7 CFR §4280.125(b)(5)). Residential projects are also out (7 CFR §4280.122(b)(4)).

What Do You Need to Apply?

• A project located in a rural area (7 CFR §4280.122(a)(4)). If you apply as a small business, your business must be in a rural area too (7 CFR §4280.104).
• A grant request between $1,500 and $250,000 for energy efficiency (7 CFR §4280.122(a)(2)). You cover at least 75% of the project cost (7 CFR §4280.122(a)(3)).
• An Energy Assessment if the project cost $80,000 or less, or an Energy Audit if it cost more (7 CFR §4280.131(b)(3)).
• Your energy use before the upgrade and after it, as shown in the Energy Assessment or Energy Audit (7 CFR §4280.131(b)(17)).
• A dedicated meter for the project (7 CFR §4280.122(a)(16)).

You can check your fit in a few minutes with our eligibility tool.

Why Should Small Businesses Invest in Energy Efficiency?

If you’re seeing unpredictable or rising energy costs, you’re likely paying more than you need to. Many small businesses operate with outdated systems that run inefficiently or break down frequently, creating both high costs and business interruptions.

Energy efficiency improvements can:

• Lower your monthly energy bills

• Reduce maintenance and repair needs

• Increase the value and performance of your facility

With REAP funding covering up to 25% of the cost, the payback period on your investment becomes even shorter (7 CFR §4280.122(a)(3)).

How CGF Helps You Secure REAP Funding

Reach out to our team at CGF and we’ll help you explore your funding options, understand your return on investment, and get started on your REAP grant strategy.