MERP building energy improvement grants
Grants of up to $500,000 per Vermont municipality for assessment-recommended energy improvements to municipal buildings, with no local match requirement.
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The Municipal Energy Resilience Program (MERP) funds insulation and air sealing, more efficient heating and cooling, lighting, ventilation, and other energy measures recommended in a qualifying building assessment. The implementation application round is closed; existing awards are being delivered.
Spend in the programme's priority order: first the building envelope, such as insulation and air sealing; then switching heating systems; then lighting and other mechanical equipment; then ventilation; and finally on-site solar generation, battery storage or electric vehicle charging. The latter measures can receive leftover award funds only after weatherization, thermal efficiency or heating recommendations are pursued. Buying into a community solar project is excluded. If an award cannot cover the entire agreed scope, recipients must complete it to the extent their funding allows while following these priorities.
Renewable or electric heating is the preferred replacement. After review, other heating upgrades can be recommended if a non-fossil system is technically infeasible as the primary heat source, provided they reduce fossil-fuel consumption and meet the Act's goals.
Necessary project costs beyond construction, such as permits, legal fees, architectural and engineering services and construction oversight, can be funded within a budget capped at 20% of the construction budget. For awarded soft costs, the FAQ specifies up to 20% of the construction cost of approved measures. Awards also include a 10% contingency calculated from each building's awarded total to cover construction-cost increases. Newly discovered structural or health-and-safety problems cannot be paid from soft costs unless explicitly included in the grant agreement.
BGS may approve an advance for a municipality that demonstrates financial hardship. More evidence is needed when the advance exceeds 20% of the award. Recipients must send receipts and proof of payment to BGS and show that all advance money was spent on eligible project costs before requesting reimbursement of remaining funds. There is no required local cost share, and this grant can be used as match for other federal funding.
Eligibility
- Vermont cities, towns, fire districts and incorporated villages qualify. Act 172 also covers other governmental incorporated units. School districts are excluded.
- The programme focuses on existing municipally owned buildings. Perpetually leased facilities are considered individually, with a lease required alongside the signed agreement and Affirmation of Use of Funds. Replacing a municipal building that is no longer viable or has a poor return on investment can qualify individually for specific energy measures in the replacement building; it does not create general new-construction eligibility.
- A MERP energy resilience assessment, or an equivalent assessment completed within the previous five years with no subsequent repairs or renovations, is required. The previous assessment must cover every item in Act 172 §2(d) and be verified by BGS; an incomplete assessment needs a partial MERP assessment. Applicants could apply while remaining assessment information was being collected. Both Level 1 and Level 2 MERP assessments qualify. The assessment must cover building work, costs and timing; heating and insulation improvements; feasibility of batteries, charging and on-site renewable generation; cost and equipment-lifetime estimates; and phased priorities.
- Act 172 requires a written commitment to conduct community workshops and a self-assessment.
- Municipalities must attest to high-speed Internet access under the State Telecommunications Plan or a plan in place by the end of 2024 to provide it. Membership in a recognized Communications Union District satisfies this requirement.
- Recipients must attest to accessibility under the Americans with Disabilities Act (ADA), or undertake accessibility improvements if the building is not fully compliant. The FAQ requires using up to 20% of the grant award toward those improvements. Its current spending provision permits an amount up to 20% of that building's implementation construction cost, for work inside the awarded building and documented in the grant scope. Recipients may instead self-certify full compliance before using the grant.
- Obtain all required building permits and follow building codes. Check the linked historic-review form and exemption list: for example, work on a building under 50 years old can be exempt if it does not visibly affect a surrounding historic district. Non-exempt awarded buildings required a form submitted to the Vermont Division for Historic Preservation by July 1, 2025; approval was not required by that date. Missing the submission deadline does not itself cancel the grant, but reimbursement pauses until the requirement is satisfied.
- Follow municipal procurement policies and provide the policy with the signed agreement. BGS encourages competitive bidding; a noncompetitive purchase requires sole-source documentation and justification. List the State of Vermont as an additional insured on the certificate of insurance. Contracts exceeding $250,000 require a proposed subcontractor list for BGS.
The competitive round prioritized communities with high household energy costs relative to income and limited resources, then lack of administrative capacity, location, community size and whether another municipal division had already received funding.
How to apply
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- Closed implementation-grant round; existing awards continue under their grant agreements.
Applications opened on August 27, 2024 and closed on September 27, 2024. Awardees had to return signed grant agreements and the Affirmation of Use of Funds by December 16, 2024. This entry describes that closed grant round.
Existing recipients should use the forms on the BGS implementation-grant page. Sign the Affirmation of Use of Funds to be eligible for reimbursement. Email a completed Payment Request Form, purchase invoices and proof of payment to BGS.MERP@vermont.gov, stating the requested amount in the email. Proof can be a receipt, cancelled check or bank statement identifying the contractor and paid invoice. Uploading documents to a quarterly report does not request reimbursement; send the separate email.
Report each quarter in which money was spent using the programme's Jotform, including invoices, proof of payments and other project documentation. Reports are due on the last day of the following month: October 31, January 31, April 30 and July 31. If no money was spent, email BGS to notify it instead. Once funds are spent and projects complete, a final report can be submitted within that quarter.
If approved projects and spending were incomplete on September 30, 2026, the municipality must prove that vendors are under contract for the remaining approved work to receive remaining funds. Send BGS a written document signed by the municipality and contractors identifying the work and its specific costs, aligned with the grant scope and spending priorities. Grant funds must be expended by December 31, 2026; BGS support runs to that date, while regional planning commission assistance may continue beyond it.
For scope changes, the agreement's primary signing executive must email BGS a narrative identifying the existing and proposed scope, site-specific justification and a budget analysis explaining how added work will be paid for or released funds used. BGS must approve the change and the recipient must re-sign the amended agreement before further reimbursement. Work on unaffected buildings may continue during review, but reimbursement for any awarded building pauses until signing. Significant shifts away from approved priority measures also require BGS review.
BGS plans random compliance audits of 15% of projects and can increase the share if issues arise. BGS and the regional planning commissions carry out a final inspection at project closeout after substantial completion.