E3 Guide for Municipalities

How to Use This Guide

The E3 guide—short for Electrification and Energy Efficiency—is a shortlist of incentives available to municipalities for various types of projects that save on utility costs and reduce emissions. While not exhaustive, it includes the best opportunities currently available from the federal and state governments, along with those from Efficiency Vermont, Green Mountain Power, and a handful of other organizations. It was developed by the Shared Energy Coordinator program.

This guide does not constitute legal or tax advice. We strongly recommend that municipalities consult with their financial and legal staff as applicable before pursuing federal tax credits.

A Note on Cooperative Procurement

Municipal entities may be able to take advantage of cooperative procurement organizations such as Sourcewell. Procurement cooperatives issue nationwide requests for proposals (RFPs) designed to exceed the requirements of local government procurement policies. So instead of issuing their own RFPs, local governments can simply select from contracts already secured by the cooperative. These contracts frequently offer discounts below MSRP to state and local governments. In addition, discounted purchases made through procurement cooperatives can potentially be combined with the incentives listed below for even deeper discounts. Always ensure that contracts secured through procurement cooperatives comply with your local procurement/purchasing policy before engaging with contractors.

General Funding Opportunities for Municipalities

There are a variety of mechanisms available to municipalities for funding electrification and energy efficiency work. This page outlines some of the most common sources of grant funding and financing.

Electric Vehicles, Chargers & Mobile Machinery

Whether you need a light- or heavy-duty electric vehicle, chargers, or mobile machinery like a forklift or zero-turn mower, there are rebates and tax credits that municipalities can take advantage of. See this subpage for more information.

HVAC

Heating, Ventilation & Air Conditioning is often one of the largest operating expenses for any municipality. Check out this subpage to explore your options for converting to low- or zero-emissions HVAC technologies that will help you save on utility costs. 

Solar Arrays & Other Clean Generation

Investing in solar or other types of clean power generation such as wind can be a great choice to reduce or even eliminate your town’s electric bill. See this subpage for a list of federal tax credits towns can use to subsidize clean generation projects using IRS Elective Pay.

IRS Elective Pay

Now, for the first time, tax-exempt entities such as municipalities can be paid directly for the full value of certain federal tax credits by taking advantage of a policy called IRS Elective Pay. The tax credits eligible for Elective Pay can help subsidize the construction of municipally-owned energy generation facilities and the purchase of electric vehicles and equipment. Please see the resources below to learn more about eligible projects and the Elective Pay process. TRORC strongly recommends that towns consult a tax attorney before pursuing Elective Pay.

Please contact Harry Falconer with any questions.

Updated August 2024.