HARRISBURG, United States — The state's Department of Environmental Protection plans to give away $1 million to help small businesses make environmentally friendly improvements that ultimately lead to a larger bottom line.

The agency began taking applications Monday for the 2007 Small Business Advantage Program. The grants will let small businesses with less than 100 employees implement projects that prevent pollution and improve energy efficiency.

"Small businesses are a driving force behind Pennsylvania's economy, but rising energy costs are putting pressure on many of these employers' bottom lines," said Julien Gaudion, the agency's small business ombudsman. "More and more, companies are realizing that environmentally conscious decisions about energy consumption are smart business decisions. If a business can cut its energy usage, it can reduce its expenses and increase its competitive position in the market."

The program gives 50 percent matching grants up to $7,500 to offset the expense of buying new equipment or implementing new procedures to cut energy use or pollution.

The projects must save the applicants at least 10 percent in energy- or pollution-related expenses a year. Examples include motor controller upgrades, water recycling systems, solvent recovery systems and clean energy power projects.

The grants can be used for some projects related to the building's envelope or indoor environment, such as HVAC systems or components, air curtains, insulation and high-efficiency lighting systems.

Ineligible projects include: equipment or processes related to pollution control, such as scrubbers, dust collectors or filters; routine maintenance or repair of existing equipment; labor costs, research and development projects; unsound technology and projects that increase pollution.

Grant recipients must complete a follow-up report one year after the project is complete that details the benefits and financial costs and savings.

Applicants, which could be manufacturers, retailers or service providers, must be for-profit business entities located within the commonwealth.

Grants are awarded on a first-come, first-served basis. Applicants may apply through Sept. 28. Since 2004, the program has given $2.8 million in grants to help 500 businesses make environment-related improvements.