Industrial Modernization Grant
The Industrial Modernization Grant helps manufacturing and industrial businesses, hospitals, and universities to modernize their facilities and processes, increasing competitiveness and productivity, building a future ready industrial economy, and paving the way for cleaner air, healthier neighborhoods, and better jobs.
Funded by the Portland Clean Energy Community Benefits Fund (PCEF) and administered by Prosper Portland, the program is an innovative public-private partnership convened by the City of Portland and informed by private and non-profit community partners.
Who is the grant for?
This grant is for manufacturing and industrial businesses, hospitals, or universities located in the City of Portland or property owners who lease to eligible businesses.
Grant awards range from $25,000 to a maximum of $300,000 per applicant and will be issued on a reimbursement basis. Grant program participants will be required to match 25% of the eligible project costs. Eligible project costs must be associated with an industrial decarbonization project.
Step 1: Technical Analysis
Prosper Portland is working in close partnership with Energy Trust of Oregon on the Industrial Modernization Grant program. Before submitting an application, all applicants must undergo Technical Analysis with the Energy Trust of Oregon. This is a required component for application submission.1
If you are in need of a Technical Analysis for your project, fill out the eligibility section of the application, indicate that you have not yet obtained a Technical Analysis, and we will refer you to an EnergyTrust of Oregon representative.
The Industrial Modernization Grant program runs multiple award periods, beginning Fall 2026. Applicants for the Fall 2026 window should have detailed, well-scoped project submissions. Early-stage or concept proposals will instead be held for 2027 review, which will include a broader range of opportunities, including funding for feasibility studies.
Once you have completed your Energy Trust of Oregon Technical Analysis, you may submit your Industrial Modernization Grant application.
1Applicants who believe they’re ineligible for Energy Trust of Oregon incentives may contact us for more direction at IndustrialModernization@prosperportland.us.
November 2026
01
Applications open
December 2026
31
Applications close
February 2027
Awards announced
Grant Details
Join us at an informational session for the launch of Prosper Portland’s new Industrial Modernization Grant Program.
Grant awards range from $25,000 to a maximum of $300,000 per applicant. Additionally:
- Grant program participants will be required to match 25% of the eligible project costs. Sources can include owner investment, debt capital, and incentives such as other grants, utility, state, or federal programs.
- The grant amount plus eligible incentives may not exceed 100% of the total project cost.
- At minimum, 20% of total grant program funds are reserved for businesses with fewer than 100 employees.
A Business Entity meeting all the following criteria:
- Has a current City of Portland Business License and State of Oregon business registration;
- Type of business falls under an eligible NAICS code (identified on pages 120-122 of the BPS Portland Clean Industry Study and also listed in the grant application); and
- Is located within Portland’s city limits, or if relocating to the City of Portland, must have a signed lease or purchase agreement for property within Portland city limits.
A Property Owner who meets all the following criteria:
- Has a current City of Portland Business License and State of Oregon business registration;
- Is located within Portland’s city limits; and
- Leases their property to a business meeting the eligibility criteria above, with at least 2 years remaining on the lease term at the time of grant agreement execution OR owns an eligible business operating out of commercial or industrial property they own.
Ineligible Persons or Entities
In addition to persons or entities that do not meet the eligibility criteria above, the following persons or entities are ineligible to receive this grant:
- Nonprofit entities
- Persons or entities that have received a Building Energy Efficiency (BEE) Grant; and,
- Businesses operating on residentially zoned property.
Grant recipients may be eligible for the reimbursement of project costs associated with an industrial decarbonization project of their choosing. Applicants may propose projects implementing either established or innovative technologies.
Suggestions for eligible project types can include, but are not limited to:
- Industrial Heat Pumps (space & water heating);
- Insulation / Weatherization (building or equipment, pipes, etc.);
- Process Efficiency;
- Advanced Electrification;
- Controls (reduce peak demand);
- Waste Heat Recovery;
- Energy Efficiency (motors, drives, compressors);
- Forced Circulation Generator Engine Block Heaters;
- Battery Backup (retiring diesel generators); and/or
- Regenerative Thermal Oxidizers.
Additionally:
- All projects must, at minimum, meet or exceed a cost effectiveness threshold set at $200 per lifetime metric ton of CO2 saved.
- Related measures identified as critical to implement the decarbonization project may also be eligible. For example, structural or electrical upgrades required to install new manufacturing equipment. Grant funds toward these improvements cannot exceed 30% of the total grant amount.
- Up to 30% of the awarded grant dollars can be used for soft costs such as design, architectural and engineering services, permitting fees, and project management.
- Program staff will review the application for eligibility and budget availability.
- Program staff may follow up with applicants to ensure application materials are complete, and/or to clarify details in the application to ensure accurate and equitable evaluation.
- The Program’s Partnership Committee will make funding recommendations based upon eligibility criteria and evaluation metrics.
- If the application is determined to be eligible and selected for funding, the applicant will receive a grant award notice that will include next steps and documents to be submitted to advance to a grant agreement to fund the project.
- Certain work may be required or precluded as a condition of funding.
- Applicant will be responsible for obtaining and submitting proof of necessary regulatory approvals (e.g. city land-use and building permits or other permissions related to landmarks and historic preservation).
- All work must comply with city, state, and federal regulations.
- Program staff have the sole authority to determine eligibility of proposed work and confirmation of completed work.
- Changes to approved work must be pre-approved by Prosper Portland to be eligible for reimbursement.
The following evaluation metrics will be used for scoring applications:
CO2 Reduction Cost Effectiveness (Grant $ / MT CO2 saved) – 50% Total Weight
The cost effectiveness will be evaluated based upon the Energy Trust of Oregon Technical Analysis and the project budget submittals.
Community Benefit Criteria – 50% Total Weight
The community benefits will be evaluated using both the Energy Trust of Oregon Technical Analysis and the answers to questions asked in the Industrial Modernization Grant application.
| Community Benefit Criteria | Weight |
|---|---|
| Air Toxics (non-CO2) Reduction | 7.5% |
| Business retention or expansion opportunity | 7.5% |
| Indicators of Quality Jobs | 7.5% |
| Community / Environmental Justice Partnerships | 5% |
| Improved Workplace Comfort/Safety | 5% |
| Innovation | 3.75% |
| Traded Sector Company | 3.75% |
| Proximity to Residential Areas | 2.5% |
| Project Feasibility | 2.5% |
| Long Term Job Creation | 2.5% |
| Project Scalability | 2.5% |
| Total Weight | 50% |
The following conditions apply for bidding out design and construction scopes of work:
- Grantee to obtain and submit design and contractor bids for all work to be performed using grant resources.
- Prosper Portland is committed to supporting a healthy climate and an inclusive contracting industry through its projects and programs. For applicants who are awarded a maximum grant ($300,000) and seek additional Prosper Portland loan or grant capital, compliance with Prosper Portland’s Green Building Policy and Construction Business & Workforce Equity Policy may be required.
- Grant recipients will be required to certify contractor compliance with Portland Clean Energy Fund’s wage requirements and may be asked to participate in a wage audit or reporting.
- Grantees must obtain at least one bid for each scope of work proposed.
If the applicant is a licensed contractor who wishes to self-perform work, an additional bid must be submitted to validate the applicant’s bid. Contractor fees and overhead for applicant owners will not be reimbursed. - All contractors must be licensed by the State of Oregon.
- All construction contracts will be between the applicant and contractor.
- Program staff reserve the right to reject the Grantee’s proposed contractor(s).
The following general conditions will apply to all projects:
- Improvements funded by the grant will be maintained in good order.
- Property taxes must be current when the Grant Agreement is issued.
- Compliance with the City of Portland Business License and State of Oregon Registry is required.
- When provided by Prosper Portland, all projects shall display signage indicating Prosper Portland, BPS, and/or PCEF’s involvement in the improvement work.
- By virtue of participating in the Program, grant recipients commit to actions and reporting through Portland Means Progress for a three-year period, at minimum.
- Grantees may be required to repay the grant funds if they leave the City of Portland within three years of grant agreement execution, or if terms of the grant agreement are materially breached.
- At time of grant agreement execution, Grantee must be in compliance with all existing Prosper Portland and City of Portland contracts and agreements.
Frequently Asked Questions
To submit a complete application, you will need:
- Complete technical analysis from Energy Trust of Oregon
- City of Portland Business License Number
- State of Oregon Business Registry Number
- Project Budget (in PDF format)
The application also requires the following business specific information for the industrial business operating at the project location:
- Description of the business employment practices, including policies and/or practices around providing living wages, transparent hiring and onboarding, comprehensive benefits, training and advancement, predictable hours, and worker safety and engagement.
- Business retention, expansion, or relocation plans.
- Business industry
- Employee count
While a building owner without an eligible tenant in place may pass the initial eligibility screening, they would be unlikely to receive a grant award. Applications are evaluated based upon business-specific information for the industrial business operating at the project location. Consider applying once you have an eligible tenant in place.
A project can begin after an agreement is signed with Prosper Portland. Prosper Portland cannot disburse funds for past work or work that was started prior to signing the grant agreement. All disbursements must be for approved bids that have been captured in the grant agreement.
The provisional grant approval will include a maximum possible grant amount based upon the application and funds available. Projects may be funded in full, in part, or not at all depending on application evaluation, scope, and funds available. Once the project scope is finalized, the Grant Agreement will detail the final approved grant amount. Grants are disbursed on a reimbursement basis and require proof that the work was completed (such as photos of the completed work, final invoices, and proof of payment) prior to disbursement.
Prosper Portland will open additional funding opportunities through the Industrial Modernization Grant program in 2027. You may keep apprised with program updates by subscribing to the Prosper Portland newsletter, or by checking this page. Applications not selected for the Fall 2026 funding opportunity are welcome to reapply in 2027 and may seek feedback on the competitiveness of their application by emailing IndustrialModernization@prosperportland.us.
An application is not a guarantee of grant award for the Industrial Modernization Grant program. Applications are reviewed for initial eligibility as they are received and evaluated alongside other applications. Notifications for both provisional awards and for unsuccessful applications will be sent in February 2027.
An applicant should expect to hear back on their potential eligibility within two weeks from their application date to the Industrial Modernization Grant program. After determining eligibility, an applicant should expect to hear back on potential award in February 2027.
Let's get started
If you are in need of a Technical Analysis for your project, fill out the eligibility section of the application, indicate that you have not yet obtained a Technical Analysis, and we will refer you to an EnergyTrust of Oregon representative.
Questions? Contact IndustrialModernization@prosperportland.us
