Alternative Fuels Incentive Grants

The Alternative Fuels Incentive Grant (AFIG) Program, administered by the Pennsylvania Department of Environmental Protection (DEP), offers funding for projects that advance the use of clean alternative fuels in transportation within the Commonwealth of Pennsylvania. With an annual funding allocation of approximately $5 million from the utilities gross receipts tax, the AFIG program was established under Act 166 of 1992 and revised in 2004 to support environmental and economic improvements through clean energy adoption. Its overarching mission is to reduce dependence on foreign fuels, enhance Pennsylvania’s air quality, and promote economic development through the advancement of alternative fuel usage in transportation sectors. The 2026 AFIG program offers reimbursement-based funding through a competitive application process. Funding is available in three major project categories: (1) purchase or retrofit of alternative fueled vehicles, (2) construction or expansion of refueling infrastructure for fleets, and (3) innovative technology projects related to alternative fuels and vehicles. For vehicle purchase or retrofit projects, funding supports the incremental cost of new alternative fuel vehicles or the retrofit of new conventional vehicles, with maximum award amounts ranging from $3,000 to $100,000 per vehicle depending on the vehicle class, fuel type, and whether it operates in an Environmental Justice (EJ) area. Infrastructure projects are eligible for up to $300,000 per application and must support fleet vehicles, not public refueling. Innovative technology projects must demonstrate a high potential for commercial application and environmental benefit and include a 50% cost share. Eligibility for AFIG grants is broad and includes school districts, municipal authorities, political subdivisions, incorporated nonprofits, corporations, LLCs, and partnerships registered in Pennsylvania. However, state and federal agencies, including Pennsylvania’s State System of Higher Education institutions, are not eligible. For vehicle projects, applicants must secure and provide proof of access to compliant fueling infrastructure and commit to operating funded vehicles in Pennsylvania for at least two years. The DEP prioritizes funding for new applicants, those serving EJ areas, local governments, school districts, and organizations serving vulnerable populations. Projects must occur entirely within Pennsylvania and demonstrate readiness, environmental benefits, and economic impact. Applicants must apply online through Pennsylvania’s Electronic Single Application (ESA) system. The program offers two submission windows in 2026: the first closing at 12:00 PM on April 1, and the second at 12:00 PM on October 7. Applications must be complete, with supporting documentation including project narrative, financial commitments for matching funds, equipment specs, emission certification (for vehicles), and a Worker Protection and Investment Certification Form per Executive Order 2021-06. Each project category has additional documentation requirements, such as fleet summaries, site plans, and usage plans for infrastructure and vehicle projects. DEP reviews all applications competitively, using criteria such as environmental benefit, fuel displacement, economic impact, project readiness, and the extent of operations in EJ areas. Electric vehicle projects are further evaluated based on managed charging strategies that optimize off-peak electricity use. Notification of awards will follow a review by DEP staff and approval by the DEP Secretary and Governor’s Office. Upon award, grantees will be required to execute a grant agreement, after which they can begin reimbursable work. All project activities must occur within a two-year period of performance starting from the grant agreement execution date. Contact for this grant program is Josh Dziubek, Energy Program Specialist at DEP, reachable at 717-705-0374 or [email protected]. The program does not permit late or supplemental submissions. Potential applicants are strongly encouraged to consult with DEP staff before submitting to ensure their project’s eligibility and competitiveness. Additional resources, including application guides and FAQs, are available through the AFIG program website. Projects previously supported by Volkswagen’s Driving PA Forward program are not eligible for AFIG funding.

Avoid common errors such as missing documentation, incomplete budgets, and failure to prove vehicle domicile in PA.