Small businesses across Pennsylvania often face the challenge of managing rising energy costs while trying to remain competitive. By investing in energy upgrades, these businesses can cut monthly utility bills, reduce maintenance expenses, and extend equipment lifespan. Over time, these improvements not only pay for themselves but also create long-term savings that strengthen financial stability. That’s where the 2025 Small Business Advantage Grant comes in, offering vital support for energy efficiency for small businesses.

Program Overview

The Pennsylvania Department of Environmental Protection (DEP) has launched the next round of the Small Business Advantage Grant (SBAG) for 2025–2026. This initiative provides reimbursement grants to help small businesses adopt equipment and processes that improve energy efficiency, prevent pollution, and protect natural resources.

With approximately $1 million in funding available, this round of grants will be distributed on a first-come, first-served basis. Applications open August 1, 2025, and close March 13, 2026, or sooner if funds are exhausted.

Funding Levels

The grant program offers tiered funding levels depending on project scope and location. Eligible projects may receive:

• Up to 50% of costs, capped at $7,500.
• Up to 65% of costs, capped at $9,750, for projects located in Environmental Justice areas or demonstrating significant environmental savings.
• Up to 80% of costs, capped at $12,000, for projects that meet both criteria.

These funds can be applied to a range of eligible projects including lighting upgrades, HVAC improvements, boiler replacements, refrigeration system upgrades, truck retrofits, medical x-ray and scanner updates, and natural resource protection projects.

Eligibility Requirements

To qualify, applicants must:

• Be a Pennsylvania-based, for-profit business with 100 or fewer full-time equivalent employees.
• Be registered to do business in Pennsylvania and hold an SAP Vendor Number.
• Pay contractors in full before seeking reimbursement.
• Complete project work between July 1, 2025, and June 30, 2026.

Projects must demonstrate at least $500 in annual savings and reduce energy or pollution-related expenses by at least 20%. Natural resource protection projects are exempt from the savings requirement but must show measurable pollution reduction benefits.

Application Process

The grant application is submitted online through the Commonwealth’s Electronic Single Application (ESA) system. To apply, businesses must:

1. Identify the project and consult vendors or technical assistance providers if needed.
2. Obtain itemized quotes or estimates for proposed equipment.
3. Collect required documents, including utility bills and equipment specifications.
4. Complete the SBAG Grant Calculator to determine projected savings and award estimates.
5. Submit the full application with supporting materials before the deadline.

Why It Matters for Small Businesses

Programs like the 2025 Small Business Advantage Grant give businesses the opportunity to offset the upfront costs of upgrading outdated, inefficient equipment. Beyond immediate financial help, these investments create lasting value by lowering energy use, enhancing workplace efficiency, and demonstrating environmental responsibility. With available tiers of funding, even modest projects can become more affordable and impactful.

For small businesses in Pennsylvania, this grant is a chance to reinvest in long-term success while supporting statewide sustainability goals. Click here to read the full overview of the grant program.