IAC implementation grants for small manufacturers

Learn more about free assessments and implementation grants for your manufacturing facility.


Quick takeaways

  • Do you want to save on energy costs at your manufacturing facility and reduce energy and water waste? If so, the U.S. Department of Energy’s (DOE’s) Industrial Assessments Centers (IAC) Program may be for you. 
  • The IAC program enables small and midsized manufacturers to get a no-cost energy assessment. Following this, manufacturers can also apply to the Implementation Grants Program. This program can provide funding to implement assessment recommendations and upgrade your facility. 
  • The Implementation Grants program provides funding of up to $300,000 per project. There is a 50% cost share requirement. For example, if a project costs $100,000, an implementation grant can cover up to $50,000. Applicants would need to make up the remaining $50,000 from non-federal sources.
  • You may be able to complete the Implementation Grant application in as little as an hour. 
  • SBA may be a helpful resource if you need capital to meet the 50% cost share requirement, or business counseling. Learn more through our District Offices and Resource Partners
  • For more information, see our How-to Guide for IAC Implementation Grants.

About IACs and implementation grants

For over 45 years, Industrial Assessment Centers (IACs) around the country have operated with bipartisan support to assist small and medium-sized manufactures to save energy, improve productivity, and reduce waste by providing no-cost technical assessments—and training the next generation of energy-savvy engineers in the process. 

The Bipartisan Infrastructure Law allocated $400 million to expand the IAC network at community colleges, labor unions, and trade schools, as well as introduce implementation grants to help manufacturers fund the project recommendations included in energy assessments. The $400 million investment reflects the Biden Administration’s distinct and historic investments in climate and commitment to on-shoring manufacturing and bolstering American supply chains.   

The IAC Implementation Grants Program provides grants of up to $300,000 per project at a 50% cost share. For example, if a project costs $100,000, an implementation grant can cover up to $50,000. 

Covered projects include:

  • Improvements to site energy or material efficiency 
  • Cybersecurity infrastructure
  • Reductions to site waste generation and greenhouse gas emissions 
  • Non-greenhouse gas pollution

All projects must be related to recommendations in the IAC, Onsite Energy/CHP TAP, or qualified energy assessment report. The grants support a wide variety of projects, including:

  • Onsite solar
  • Battery storage technology 
  • Waste heat recovery system installations
  • Improvements for lighting, heating, ventilation, and air conditioning
  • Electrifying industrial equipment and fleets 

Note: Other federal funds cannot count towards the applicant’s share. Valid cost share options include internal capital, in-kind contributions, state and local public programs, private loans – including SBA-guaranteed sources, utility programs, leases, and Energy Savings Performance Contracts (ESPCs). 

The IAC implementation grants program can provide up to $300,000 in grant funding (at a 50% cost share) per project to improve energy efficiency, optimize operation productivity, and reduce greenhouse gas emissions based on recommendations from IAC or similar energy assessments. Thanks to a unique funding mechanism, the application process is much shorter and simpler than most traditional federal funding opportunities. 

Eligible applicants include small- to medium-sized manufacturers with: 

  • Gross annual sales of less than $100M;
  • Annual energy bills between $100,000 - $3,500,000; and
  • Fewer than 500 employees at the plant site.

Additional details that may be relevant for your firm: If the manufacturer/facility is an individual LLC that pays separate taxes from the parent company, then the eligibility is based on the LLC.​ Applicants must also first receive an energy assessment from an Industrial Assessment CenterOnsite Energy/Combined Heat and Power Technical Assistance Partnership (TAP) Center, or qualified third-party assessor
Note: IAC and Onsite Energy/Combined Heat and Power TAP assessments are free to the manufacturer. Qualified third-party assessments may or may not be free to the manufacturer.

Step 1: Receive an energy assessment from one of three sources

More third-party assessors will be added. DOE cannot guarantee that third-party assessments will be free. 

Step 2: Apply for an IAC implementation grant to help fund assessment project recommendations:  

  • Visit the opportunity website for more information, including FAQs, and to apply.  
  • Applications are accepted on a rolling basis throughout the year and will be reviewed and awarded quarterly. Applications will remain open until the $400 million in grants is fully spent.   

How SBA can help your business

The IAC implementation grant program has a 50% cost share requirement. Small manufacturers could use SBA-guaranteed capital to meet it. Read on for brief descriptions of SBA-guaranteed capital programs. If you are interested, use Lender Match to find lenders that may be interested in funding businesses like yours.

7(a) loan program

Small manufacturers may consider leveraging an SBA 7(a) loan to meet the 50% cost share requirement of the IAC implementation grant program. 7(a) loans can be used for: 

  • Acquiring, refinancing, or improving real estate and buildings
  • Short- and long-term working capital 
  • Refinancing current business debt 
  • Purchasing and installation of machinery and equipment, including AI-related expenses
  • Purchasing furniture, fixtures, and supplies 
  • Changes of ownership (complete or partial)
  • Multiple purpose loans, including any of the above

The maximum loan amount for a 7(a) loan is $5 million.  

504 loan program

The 504 loan program may currently work for a smaller subset of small manufacturers. Current program rules state that 504 loans may be used to finance up to 40% of a project cost. That includes a 50% cap for all federal funds received for that project. The rest must come from other, non-federal sources. For example, a project cost is $10M. A 504 loan can finance up to $4M. Up to an additional $1M in federal dollars (from other sources such as IAC grant) can be used for the project, just so long as total federal dollars do not exceed $5M. 

Small manufacturers may be interested in the 504 Refinance for Expansion Program. This is a permanent addition to the 504 loan program. It allows for the refinancing of existing debt with the expansion of a new project.

Funds can be used for the purchase of improvements, including:

  • Grading
  • Street improvements
  • Utilities
  • Parking lots
  • Landscaping and construction of new facilities  
  • Modernizing, renovating, or converting existing facilities

SBIC program

Small manufacturers may also be interested in SBA’s SBIC program. SBICs are investment vehicles. They provide equity and debt financing to small businesses to help them grow. SBICs are exempt from affiliation and control rules. Small businesses that take SBIC investments still qualify for small business set-aside government contracts.

Additional resources for your small business

Last updated April 9, 2024