Volkswagen and Funding Update: January 2020
We’ve identified over 85 incentive programs in 2019 that included eligibility for on-road propane vehicles in the U.S. The programs accounted for $1.9 billion in potential incentive funding, although about $873 million of it are for public transportation programs.
Here are the high-level takeaways:
- 87 incentive programs from 34 states included eligibility for on-road propane vehicles in the U.S. The programs accounted for $1.9 billion in potential incentive funding.
- Of those, 48 programs (55 percent) and $502 million (25 percent) was sourced from the Volkswagen Environmental Mitigation Trust funds.
- By amount of funding, California (18 programs and $765 million) and the federal government (10 programs and $722 million) were the leading sources.
- Other key states included Texas (six programs and $158 million), Missouri (five programs and $13 million), and Pennsylvania (four programs and $27 million).
In 2019, there were 241 total VW and non-VW awards for propane buses, totaling $14,030,368.
Now it’s time to look to 2020. In some states, the second round of Volkswagen Environmental Mitigation Trust funding will open, so be aware of what’s happening in your area. There is still a tremendous amount of opportunity out there — and we can help you!
Our government affairs team has worked with the state beneficiaries to develop funding programs that create competitive opportunities and encourage level playing fields for all alternative-fuel technologies.
Please contact Chelsea Jenkins at Chelsea.Jenkins@roush.com to discuss how best to approach and plan for the next phase of Volkswagen settlement (and other funding) opportunities in your state. Visit www.roushcleantech.com/volkswagen-settlement or www.propane.com for more information.
New Engine Is Coming
Ford is transitioning its medium duty spark-ignited engine from the current 6.8L V10 to the all-new 7.3L V8. This means that we also will bid farewell to the 6.8L and welcome the 7.3L. However, the exact timing of when the transition will occur is a moving target. We can estimate it’ll be this fall, depending on demand, mix of inventory and several other factors that Blue Bird will manage.
The change can leave a multitude of questions, many of which are likely around bid specifications. The V10 in gasoline and especially propane has built a loyal following — nearly 74 percent in the 2019 fiscal year. So, how do we impact specifications to best position Blue Bird gasoline and propane buses without risking the possibility of specifying ourselves out of the bid? We believe that one way is by using specs that can flex between 6.8L and 7.3L, but still highlight all the advantages against the competition. This is like finding the least common denominator, which allows you to either meet or exceed regardless of engine platform, such as having a minimum horsepower requirement of 320. Although we don’t have final power numbers on the 7.3L, Ford’s target is greater than the current engine, allowing you to meet or exceed that line item. Another way is to incorporate attributes beyond the engine that are specific to the fuel types in the same way, like Blue Bird’s superior mounting of the gasoline fuel fill or the ROUSH CleanTech propane fuel rail with top loading injectors.
In an effort to help with “flex specs” development, we have compiled a list of items, similar to the horsepower example given above. These items are based on what we know today and caveat emptor, as not all development is set in stone. But we have a reasonable level of assurance that the items listed are safe to use. You’ll find all the details in this three-page summary, “Specification Content.” Please note that the document is intended for dealer use only.
In order to gain access to the “Flex Specs” document, please complete the following form:
Texas Events Draw Attention to Propane Buses
ROUSH CleanTech participated in two very successful events in Texas to promote propane buses. Both of these brought in experts to raise awareness about cleaner student transportation. Topics covered were propane bus financial savings, health benefits and available grant funding in the state.
Lone Star Clean Fuels Alliance and Eanes Independent School District hosted the first event. The panel consisted of representatives from the school district, Propane Education & Research Council and Texas Natural Gas Foundation. Attendees included people from 10 area school districts, Texas States Health Services, Capital Area Council of Governments and Propane Council of Texas.
The Eanes ISD event brought greater awareness, beyond the cost-effectiveness of propane school buses, to school districts attending by highlighting the tremendous health benefits as well. The state’s health officials who attended helped to bolster the health discussion, and they indicated that they were in process of kicking off a child-focused health study.
Another hot topic was the grant funding and resources available to assist districts in going green with propane. At least three school districts indicated they were interested in exploring propane buses further after hearing the presentations and discussions.
The second event featured Georgetown Independent School District and its adoption of propane school buses. Tucker Perkins, president and CEO of PERC, presented the district with its Clean Energy Innovation Award. Georgetown ISD was awarded this honor for its leadership in lowering emissions and promoting a healthier environment for the youth of Texas by adopting clean propane autogas school buses.
To acquire its propane school buses, Georgetown ISD took advantage of available alternative fuel rebates from the Texas Clean School Bus program. This program helps school districts save money and benefit the community with cleaner student transportation.
The panel included Perkins and speakers from the school district. The superintendent remarked on the district’s stewardship in spending taxpayer dollars while benefiting the health of the children and community. The event gained media coverage in the local newspaper, Community Impact.
Alt Fuel Tax Credits Extended
We’re happy to kick off the new year by sharing some great news. The alternative fuel excise tax credit, which expired in 2017, has been extended. The update has been extended through December 31, 2020, providing a retroactive credit for all of 2018 and 2019.
Here are the key points to know:
- The credit is approved for 2020, but users can also retroactively apply for gallons consumed in 2018 and 2019.
- Propane credits are covered at 36 cents per U.S. gallon due to an energy adjustment calculation for propane. Ignore where you see other reimbursement amounts.
- For the alternative fuel infrastructure portion of the tax credit, the fueling equipment for propane is eligible for a tax credit of up to 30 percent of the cost, not to exceed $30,000 per property.
Let’s ring in the new decade with some great news: alternative fuel tax credits are back! Although propane vehicle technology makes good economic sense without subsidy, these added incentives on the fuel and infrastructure are like the proverbial icing on the cake!
When commercial fleets look to decrease their emissions, save on budgets, and chose a sustainable fuel, many turn to propane autogas. On average, propane autogas is up to 40% less expensive than gasoline and about 50% less than diesel. One of the additional benefits of propane is the number of fueling choices it gives the operator. Let’s examine fueling and what you can expect from propane providers.
With voter-approved 2018 bond money, the district purchased 21 propane buses to replace those nearing the end of their useful life. GISD was also able to purchase an additional 12 buses with $1.3 million in added grant funds from the Texas Commission on Environmental Quality, totaling 33 buses. “Every decision we make is student-centered,” GISD Superintendent Fred Brent said in the release. “By utilizing grant opportunities and cost-efficient alternatives for transportation, we’re able to provide a cleaner, healthier way to get kids to and from school, while directing the savings into other opportunities that support teaching and learning.”
It’s exciting to see that Connecticut is taking real steps to reduce nitrogen oxides through the funds it received from the Volkswagen Environmental Mitigation Trust, which has the singular goal to reduce nitrogen oxides. Gov. Lamont recently released $6 million in VW funds to fund 15 clean air projects in the state. Two of them (total award of $1.58 million) are going to replace older model-year diesel buses with model-year 2021 diesel buses.