Carriers interested in taking advantage of the numerous financial support programs intended to help fleets make their vehicles cleaner and more efficient may find themselves wishing they'd never set out down the winding path to grants, tax credits and other incentives. Almost anyone who has been through the various application processes will be quick to tell you it is no tuneful skip down the Yellow Brick Road. Still, for fleets willing to work for it, there are funds to be had that can help to create a competitive advantage now and for when the economy stirs back to life.
SIGNPOSTS ALONG THE WAY
One secret to finding your way along the grants path is learning what each funding or credit program of interest is designed to accomplish so that you can focus on the most appropriate opportunities and tailor your application to showcase the ways in which it furthers those program goals. “The Environmental Protection Agency's Diesel Emissions Reductions Act [DERA], for example, is a good program, but it is aimed at retrofits, upgrades and repowers,” says Erik Neandross, Gladstein and Neandross Assoc., a group that consulted with Daimler Trucks North America and others on the development of grant applications for various stimulus funds.
“There was a lot of anticipation for hybrids through DERA, but no hybrids were funded at all [by round one of DERA monies],” Neandross says. “Hybrids are just not a good fit for DERA based upon the program's goals, which are to get the greatest reduction in vehicle emissions for the dollars spent — hence the focus on upgrading in-service vehicles. People interested in new alternative fuel vehicles or hybrids would be much better served by applying for the IRS tax credits or the Dept. of Energy's Clean Cities program.”
Deadlines are another signpost to keep an eye on. Generally speaking, there are usually firm deadlines for grant applications, although some programs have so-called “rolling deadlines,” which means they will keep accepting applications until all the available funds have been distributed.
It is also important to note whether the recipients are already identified when a grant is awarded. “Sometimes the grant recipients are identified right in the award announcement and sometimes grants are more open-ended,” says Jim Gossard, senior manager of product planning for Peterbilt Motors Co. “In the later case, for instance, a grant may be used to establish a retrofit or vehicle upgrade program that is then opened to certain types of carriers operating in a given area.”
If you decide to write your own applications, Terry Levinson, an environmental systems scientist for Argonne National Laboratory's Center for Transportation Research, Energy Systems Div., has reviewed many grant applications and offers some additional advice. “A lot of people just don't know how to write a grant,” she says. “You have got to answer their questions clearly without putting in a lot of superfluous information.
“If you don't feel comfortable with the process, by all means hire someone else who is,” Levinson adds. “One cautionary note, however. If you use a professional grant writer, make sure they are creating a proposal that is unique to your operation and not just using the same language they use in all the applications they write. You want your application to stand out.”
YOU DON'T HAVE TO GO IT ALONE
When it comes to seeking funding, the good news is that you do not have to go it alone unless you really want to. There are a growing number of people who now have lots of experience with grants, tax credits and other incentives who can be a huge help.
“The most logical place to begin is with your truck dealer,” says Neandross. “DTNA, as well as other truck OEMs and their dealers, have done a lot of work to develop programs to help customers find and take advantage of any available credits or grant opportunities. If they do not have the information you need, then reach out to your local Clean Cities resource or to the EPA regional offices. In two or three calls, you should be able to get to the right person.”
It can be tougher going on the state level because funds are administered through so many different agencies and organizations. In some cases, the state Dept. of Environmental Quality is awarding grants; in others, it may be the Dept. of Natural Resources, the Pollution Control Agency or a Dept. of Public Health and Environment. “States are hit or miss,” says Neandross. “The State Energy Office is usually a good place to start.”
“Fleets need to explore what is out there for them with their local dealers or with their state or county governments,” notes Bill Jackson, gm for Peterbilt Motors Co. “There are still opportunities; you just have to pick up the phone and ask.”
An abbreviated directory of funding sources for fleets
Your local truck dealer, the Internet and your telephone are probably the best avenues for gathering information concerning all the financial incentives available today to help you make your fleet cleaner and more efficient. That said, here is a short list of some of the opportunities you may want to explore before the end of this year:
FEDERAL TAX CREDITS
The Internal Revenue Service (IRS) really is here to help you when it comes to purchasing hybrids and other alternative power vehicles. Tax credits are available through the end of 2009 (or beyond in some cases) that can shorten the payback period on your green investment. They can be combined with other non-federal funds, and there is also a possibility these credits will be extended. For more information, contact the IRS at 800-829-1040 or at www.irs.gov/. It is also a good idea to double-check with your truck OEM or supplier to confirm that they have certified to the IRS that the vehicle or systems you are considering meet the requirements to claim a particular credit.
Heavy-duty hybrid electric vehicles (HEVs): A tax credit of up to $18,000 is available for the purchase of qualified heavy-duty HEVs with a GVWR of more than 8,500 lbs. A list of the current qualified vehicles and credits is available on the IRS Heavy Hybrid Vehicles Web site (www.irs.gov/businesses/article/0,,id=175456,00.html). This tax credit expires Dec. 31, 2009. However, a bill has been introduced in the House (H.R. 3367) to extend and enhance this tax credit.
Light-duty HEVs and advanced lean-burn vehicles: Qualified light-duty HEVs and advanced lean-burn technology vehicles placed in service after Dec. 31, 2005, are also eligible for a tax credit. This credit begins to phase out in the second quarter following the calendar quarter in which at least 60,000 of a manufacturer's qualifying HEVs and/or lean-burn passenger automobiles and light trucks have been sold. See the IRS Hybrid Cars and Advanced Lean Burn Technology Vehicles web site at http://www.irs.gov/newsroom/article/0,,id=157632,00.html for the current list of qualified vehicles, credits, phase-out schedules and required forms. This credit expires Dec. 31, 2010.
Alternative-fuel vehicles: A tax credit is available toward the purchase of qualified new OEM vehicles or vehicles that have been repowered by an aftermarket conversion company to operate on an alternative fuel. Qualifying alternative fuels include natural gas, liquefied petroleum gas, hydrogen, and fuel containing at least 85% methanol. Go to http://www.irs.gov/businesses/article/0,,id=175456,00.html for the current list of qualified vehicles and credits. This tax credit expires Dec. 31, 2010.
Plug-in electric drive motor vehicle tax credit: Qualified new plug-in electric drive motor vehicles that draw propulsion using a traction battery that has at least four kilowatt-hours of capacity, uses an external source of energy to recharge the battery, has a GVWR of up to 14,000 lbs., and meets specified emissions standards are eligible for a tax credit. The minimum credit amount is $2,500, and it may be up to $7,500, based on each vehicle's traction battery capacity and GVWR.
This credit applies to vehicles acquired after Dec. 31, 2009, and expires Dec. 31, 2014. Through Dec. 31, 2011, qualified plug-in electric vehicle conversions are also eligible for a tax credit of 10% of the conversion cost, not to exceed $4,000. This credit is scheduled to begin to be phased out for each manufacturer in the second quarter following the calendar quarter in which a minimum of 200,000 qualified plug-in electric drive vehicles have been sold by that manufacturer for use in the U.S.
Alternative fuel excise tax credit: A tax credit of $0.50/gal. is available for certain alternative fuels used to operate an alternative fuel vehicle, including compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas, liquefied hydrogen, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass.
To be eligible to claim the credit, you must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. (Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles also qualify for this incentive.) You must also be registered with the IRS and the incentive must first be taken as a credit against your alternative fuel tax liability, then any excess may be claimed as a direct payment from the IRS. There are a few other restrictions. Under current law, this incentive expires Dec. 31, 2009, except in the case of the credit for liquefied hydrogen, which expires Sept. 30, 2014.
Biodiesel income tax credit: A taxpayer who delivers pure, unblended biodiesel (B100) into the tank of a vehicle or uses B100 as an on-road fuel in their trade or business may be eligible for an incentive in the amount of $1/gal. of biodiesel, agri-biodiesel, or renewable diesel. If the biodiesel was sold at retail, only the person who sold the fuel and placed it into the tank of the vehicle is eligible for the tax credit. Under current law, this credit expires Dec. 31, 2009.
Fuel cell motor vehicle tax credit: A tax credit of up to $8,000 is available for the purchase of qualified light-duty fuel cell vehicles. After Dec. 31, 2009, the credit is reduced to $4,000. Tax credits are also available for medium- and heavy-duty fuel cell vehicles; credit amounts are based on vehicle weight. This tax credit expires on Dec. 31, 2014.
OTHER FEDERAL PROGRAMS
Diesel Emissions Reduction Act (DERA): The availability of round two DERA funding through the EPA was announced in early October. Compared to the $300 million offered in round one this spring, the $64 million in round two may seem small on a national basis, especially when shared with other modes of transportation, but it is targeted to retrofits, repowering older vehicles and upgrades rather than the purchase of new, alternative-fuel vehicles. The deadline for applications is Dec. 8, 2009.
Some money from round one funding is also still in play, especially on the state level. Each state (with the exception of Alaska, which declined to accept the funding) received $1.73 million. Programs vary from state to state. Some states are targeting transit or school bus fleets only, for example, while others have funding available for truck fleets as well. The grantees also vary.
In some cases, the state Dept. of Environmental Quality is awarding the grants; in others, it may be the Dept. of Natural Resources, the Pollution Control Agency or a Dept. of Public Health and Environment. A complete list by state is available at www.epa.gov/otaq/eparecovery/progstate.htm.
National Clean Diesel Funding Assistance Program: In September, the EPA announced the availability of $60 million total in funding from its annual appropriations. The total is divided into four separate Requests for Proposals (RFPs):
The National Clean Diesel Funding Assistance Program ($32 million) for projects that achieve significant reductions in diesel emissions, particularly from fleets operating in poor air quality areas.
The SmartWay Clean Diesel Finance Program ($6 million) for low cost leases or revolving loan programs to achieve reductions in diesel emissions.
The Clean Diesel Emerging Technologies Funding Assistance Program ($4 million) for diesel emissions reduction solutions that use emerging emissions control technologies.
Updates are available at www.epa.gov/otaq/diesel/index.htm or you can contact your regional Clean Diesel Collaborative. There are five in the U.S.: The Northeast, Mid-Atlantic, Southeast, Midwest, Blue Skyways (south central states), Rocky Mountain, and West Coast.
Clean Cities Coalition: On Aug. 26, the Dept. of Energy (DOE) announced the selection of 25 cost-sharing projects that will be funded with nearly $300 million from the American Recovery and Reinvestment Act (ARRA). According to the DOE, the projects will include a range of energy-efficient and advanced vehicle technologies plus the development of the refueling infrastructure for various alternative fuels.
At about the same time, the DOE also announced that it had selected 23 projects for up to $15 million in annual appropriations funding, including grants for vehicles, infrastructure and education. Much of this money is already allocated to particular fleets, but it is worth exploring if your area was among the recipients. Go to www.energy.gov/recovery/cleancities.htm to see the list of projects or to find program contacts.
State-level programs can be confusing, including who handles the administration of funds from various federal programs such as Clean Cities, along with the administration of funds that come from sources within the state, such as the Carl Moyer program or Proposition One in California. Another challenge is that some state-level grant programs are earmarked for specific fleets and projects right from the grant application, while others create more general funding sources for which fleets within a targeted group can then apply. Here are some of the state-level programs that may be worth exploring now:
Allegheny County, PA, Health Dept., Allegheny County Diesel School Bus Retrofit Program: A rolling deadline until all $500,000 in funds is awarded (www.achd.net/air/air.html).
California Air Resources Board (CARB), On-Road Heavy-Duty Vehicle Loan Program: A rolling deadline until about $48 million in funding is awarded (http://www.arb.ca.gov/ba/loan/on-road/documents/hdvloanprogram.pdf). According to CARB, trucking companies may access this loan program by contacting qualified California Capital Access Program (CalCAP) lenders participating in the Heavy-Duty Vehicle Air Quality Loan Program and completing a loan application. You may also work with your preferred truck dealer to coordinate financing through CalCAP lenders. The program utilizes a noncompetitive process implemented on a first-come, first-served basis.
The Colorado Carbon Fund: The Climate Trust is recruiting greenhouse gas offset projects in Colorado for the Colorado Carbon Fund. Projects must take place within the state of Colorado, and can be either private or publicly owned. Go to http://www.climatetrust.org/colorado.html for more information. Transportation-related projects are among those on the preferences list.
Florida Clean Diesel Rebate Program: This program is being administered by the Florida Dept. of Environmental Protection to help owners of Class 8 on-road, commercial heavy-duty diesel trucks model-year 2006 or older comply with the idling reduction rule. Owners of eligible vehicles can apply for up to three rebates ($1,500 for one vehicle and up to $4,500 for three vehicles) for the purchase and installation of auxiliary power units (APUs) in calendar year 2009. Rebates will be awarded on a first-come, first-served basis, and continue while rebate funds are still available, which they were when this issue went to press. Go to www.dep.state.fl.us/air/emission/msc/diesel_rebate.htm for additional information.
New England Great SmartWay Rebate Program: EPA New England has awarded over $1 million to Cascade Sierra Solutions to provide rebates from $100 to $1,000 per equipment item for installing APUs, trailer skirts and gap fairings, and other equipment. Go to https://csswebform.org for more information and an online application.
Texas Heavy-Duty Vehicle and Equipment Grant Program: The North Central Texas Council of Governments has partnered with the Texas Commission on Environmental Quality and the EPA to fund up to $5.7 million in idle reduction projects. Eligible applicants include public and private fleets (including long-haul trucks), owner-operators and companies that want to install and/or maintain on-site systems. Projects will be funded weekly through March 26, 2010, or until all funds are awarded. Go to www.nctcog.org/trans/air/programs/terp/hdveqp/ for details.
California's Carl Moyer Memorial Air Quality Standards Attainment Program: Created in 1999, this program is designed to facilitate the move to cleaner-burning engines by providing monetary grants to help businesses and public agencies “clean up their existing diesel engines ahead of regulatory deadlines.” To be eligible for the program, projects must be in compliance with California Air Resources Board (CARB) Fleet Rules, meet certain cost-effective thresholds, and be fully operational prior to May 20, 2011.
Go to http://www.arb.ca.gov/msprog/moyer/facts/moyerfs.pdf for additional information.
Oregon's Cascade Sierra Solutions (CSS): In August, the EPA announced that CSS would receive $9 million in funding for revolving loan, lease or bond programs to replace older diesel trucks or upgrade them with cleaner, fuel-saving technologies such as idle reduction equipment and fuel-efficient tires. “The EPA award will be leveraged with our revolving loan fund and other banking resources to provide low-interest financing to owners of about 3,000 trucks based anywhere in the United States,” said Dave Orton, communications manager for CSS. For more information, go to www.cascadesierrasolutions.org.
Clean Fuel USA: This September, the DOE awarded $12.9 million in two stimulus grants to Clean Fuel USA. The funds will be used to establish more than 100 liquid propane refueling stations in major U.S. cities in coordination with Clean Fuel USA partners, including ConocoPhillips. According to Curtis Donaldson, CEO of Clean Fuel USA, there are still funds available for converting vehicles from diesel to liquid propane. “A lot of incentives and grants are out there to help people make conversions,' he notes. “If fleets are interested in propane and they will work with us, we will help them and provide grant writing services.”
There are many more programs, especially on the state and local levels, than could be listed here. Additionally, there are ongoing programs in several states currently awaiting refunding notification for 2010. Interested fleets are encouraged to contact area resources to explore local opportunities.
Information for this listing has been sourced and quoted from a wide number of sources, including the U.S. EPA, DOE and IRS web sites, as well as many others. Special thanks are also due to Terry Levinson of Argonne National Laboratory for her invaluable monthly newsletter: National Idling Reduction Network News (http://www1.eere.energy.gov/vehiclesandfuels/resources/fcvt_national_idling.html).