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Walking the tightrope of driving sustainability initiatives forward while being held responsible for cost containment consistently ranks as one of the biggest challenges for today’s fleet managers. Between finding the right technology and resources, managing vehicle acquisition and ownership costs, keeping an eye on replacement cycles, and hitting company-wide KPIs, there is a sense that fleet managers can sometimes be playing a game of whack-a-mole. And, since 2020, alternative fuel vehicle acquisition costs have gone up, which makes the work even more challenging.
The good news is that there are innovative public and private funding programs for alternative fuel vehicles, like those that run on propane autogas, which can help many businesses source creative ways to make the numbers work.
Although it’s well-documented that propane vehicles save money over the lifecycle of the vehicle, funding assistance can reduce the financial burden that may come with the initial investment in vehicle acquisition and infrastructure installation. From local and state incentives to federal programs, there are many ways to offset adoption expenses and accelerate the transition to cleaner, cost-containing operations.
Understanding Funding Opportunities
Funding assistance initiatives that help fleets prepare for the future can include grants, rebates, and tax credits. Fleet managers can seize these opportunities if they understand what to look for and how to apply.
Local initiatives led by cities and counties provide incentives for the use of alternative fuels like propane autogas. Here are some examples of local funding that may be available:
- Rebates and grants: Compensation or financial assistance is awarded for the conversion of fleet vehicles or the installation of propane autogas refueling infrastructure. In some cases, rebates are offered to support fleets after the purchase of vehicles or installation of infrastructure. In other cases, grants can help organizations on the front end before any purchases are made.
Incentives from statewide government agencies also provide funding to help meet their respective emission reduction and energy goals. These may include:
- Rebates and grants: States that have decarbonization goals tend to offer more incentives. Look for both types of incentives to either purchase propane autogas vehicles or install a new refueling infrastructure.
- Tax credits: These assist in the purchase of the vehicle by compensating the cost through credits that are deducted from state taxes.
Federal programs typically offer the biggest funding opportunities for propane autogas conversion. These initiatives are normally targeted toward incremental adoption and emissions reduction. Common federal incentives include:
- Rebates and grants: Many programs are aimed at providing funds to buy or modify alternative fuel vehicles and to install the appropriate refueling infrastructure.
- Tax benefits: Organizations can also take advantage of tax incentives where a certain portion of the fueling station and/or fuel price is relieved from taxes.
Private organizations, including propane suppliers, may also provide funding assistance.
Identifying and Applying for Funding
The Department of Energy’s Alternative Fuels Data Center (AFDC) provides consistently updated information and resources about funding programs. Industry-related entities like the Propane Education & Research Council, state propane gas associations, and Clean Cities also frequently update their websites. Registering with local chambers of commerce is an excellent avenue to access information about local grants or rebates. Funding opportunities labeled as “clean diesel” or “diesel emissions reduction” may be a good fit for propane autogas because they’re usually geared toward reducing diesel emissions by replacing older vehicles with cleaner options.
Sometimes a simple internet search can reveal new sources of funding, too. Search terms that are close to “propane autogas,” like propane, liquified petroleum gas (LPG), or alternative fuel vehicles (AFVs), increase the likelihood of landing in the right spot.
Because many of these incentives are driven by governmental agencies, applications require a high level of thoroughness and accuracy. If documents are missing or information is murky, the application may not be processed.
Recurring Incentives and Emerging Trends
Managing grant funds, incentive programs, and tax credits typically requires a keen eye and some leg work. Successful businesses often have dedicated staff who can run point on administrative tasks and program monitoring. In the end, however, the juice is worth the squeeze; businesses can save hundreds of thousands of dollars by taking advantage of these programs.
Some programs may recur annually. For instance, tax incentives can be reported when filing taxes for the fiscal year. Be sure to confirm when tax credits expire.
Some grants and rebates are available annually, but reapplication may be needed. Renewable funding gives fleet managers the ability to schedule upgrades to their fleets. Typically, they are offered for a limited time and come with strict parameters on how and when the incentive must be used.
Emerging trends in funding have favored the adoption of electric vehicles over the past couple of years, but this need not be discouraging for fleet managers looking for propane autogas incentives. Although electric vehicles may be the touted as the vehicles of today, if the incentive is to reduce harmful vehicle emissions, propane may likely be included in the offering.
Stay Updated
There are many ways to learn about funding incentives, such as subscribing to newsletters and attending industry events, trade shows, chamber of commerce meetings, or other forums. Connecting with other fleet operators is also an excellent avenue to discover funding opportunities.
Implementing changes that drive sustainability for a fleet may seem daunting. But with the help of funding, there are ways to reduce the financial impact that comes with adopting alternative fuels.
