The grants pool for private businesses is typically small. But the Inflation Reduction Act (IRA) is making billions of dollars available to companies, communities, and nonprofits — including a special focus for those based in coal communities.
The case to apply for these funds is strong for small business owners and civic leaders in Eastern Kentucky. The energy projects incentivized by the IRA are an excellent fit for our region — and should lead to the formation of high-quality jobs, regional economic growth, and new sources of outside investment.
For example, qualifying businesses can leverage the following grants and tax credits to recoup investments in solar, wind, and energy infrastructure. These programs are intended to cover some or all of the costs related to installation, which removes upfront costs, frees up your cash flow, and often significantly reduces energy costs over the long run.
Civic leaders must also be aware of these programs. It’s likely that energy companies and expanding businesses will reach out to you to launch a collaborative effort. Such projects offer promising opportunities to the communities still forming their post-coal economic identities.
Let’s explore the 4 energy grant programs coming online soon.
If you run a small-to-mid-sized manufacturing facility, the Advanced Energy Manufacturing and Recycling Grant Program will offer funding for infrastructure investments that reduce energy consumption — and overhead energy costs.
The US Department of Energy (DOE) administers this initiative, which will distribute up to $750 million in grants for the production or recycling of advanced energy technologies by small and medium-sized manufacturers.
Implementing solar or wind-powered electricity, industrial decarbonization, clean transportation, and others fall under this program’s eligible uses. Equipping an industrial manufacturing facility to reduce greenhouse gas emissions should also qualify.
Eligible applicants include manufacturing firms with gross sales under $100 million and fewer than 500 employees at the plant site. You must prove annual energy bills run between $100,000 and $2.5 million.
This grant program will support manufacturers in:
- Census tracts where coal mines have closed since December 31, 1999.
- Coal-fired power plant units that have closed since December 31, 2009.
- Census tracts immediately adjacent to the above.
To learn more about eligible locations, reference this mapping tool provided by DOE.
Concept papers are due on March 14, 2023 at 5 p.m. ET. Applications are due on June 8, 2023 at 5 p.m. ET. Learn more here.
The DOE’s Office of Economic Impact and Diversity also administers the Low-Income Communities Bonus Credit Program through the Internal Revenue Service (IRS).
If your organization is located within a low-income community, supplies energy to low-income housing, or supplies energy to low-income communities, you may be eligible to participate.
The requirements include installing a qualified solar, wind, or energy storage facility to effectively steward your residents’ transition to clean energy. The aim is to make this transition seamless for low-income residents — as in, little to no financial impact on their energy bills or overall costs of living.
The IRS has yet to announce specific guidance regarding eligibility, applications, and program terms. In the meantime, if you supply energy to low-income communities, this is the ideal moment to consider how installing qualified energy facilities can benefit your business and your customers.
The US Environmental Protection Agency (EPA) will administer the $27 billion allocated for the Greenhouse Gas Reduction Fund via two grant programs:
The $20 billion General and Low-Income Assistance Competition and the $7 billion Zero-Emissions Technology Fund Competition will help nonprofit organizations leverage private capital for clean energy and clean air investments. Small businesses are eligible beneficiaries of these funds, meaning that nonprofits that win funds may provide them assistance with projects that reduce or avoid greenhouse gas emissions and other forms of air pollution.
It’s worth noting that at least $8 billion — 40% of this fund — will flow to disadvantaged communities, including those facing high and adverse health and environmental impacts. Given that Eastern Kentucky suffers some of the highest lung cancer rates in the nation, local organizations will have the opportunity to make a strong case for impact in their applications.
Each competition will issue a Notice of Funding Opportunity (NOFO) with greater detail on eligible applicants, beneficiaries, and uses. Check grants.gov regularly for updates (CFDA 66.957).
The IRS plans to issue $10 billion in tax credits for qualifying energy and recycling projects.
While more specific guidance is forthcoming, now is the time to start planning.
The Qualifying Advanced Energy Project Credit represents a transformative opportunity to reequip existing coal processing facilities into clean energy production and storage centers. Leveraging these funds effectively could bring a significant influx of advanced manufacturing jobs to the region. We urge our civic and business leaders to carefully consider the opportunity presented here.
How to leverage these programs — and apply for grants
There are many actions you can take today — both large and small — to prepare to apply for grants and tax credits from these 4 programs.
First, consider which might apply to your business, nonprofit, or community. Gain some inspiration from these high-level, hypothetical use cases:
- Advanced Energy Manufacturing and Recycling Grant Program: A manufacturer upgrades plant lighting from energy-intensive halogen light bulbs to LEDs.
- Low-Income Communities Bonus Credit Program: A commercial property owner installs solar panels on low-income apartment buildings they own.
- Greenhouse Gas Reduction Fund: A logistics facility in a community that meets program requirements installs solar and upgrades a small business delivery fleet to electric vehicles.
- Qualifying Advanced Energy Project Credit: An entrepreneurial venture transforms a former coal processing plant into a solar and wind energy storage facility.
Next, you must prepare for the rigors of planning, applying for, and administering grant funding. It’s a challenging hill to climb — but a rewarding opportunity if you succeed.
SOAR has created several resources to help you get started. Download the free Grants 101 resource for a comprehensive guide to this process.
Contact SOAR Innovation for more information about grant strategy and available funding opportunities for businesses, counties, municipalities, and investors.