Step-by-Step Guide | October 17, 2022
Step 1.3: Research Funding and Financing Options


There are many ways to bring down the upfront costs of electric school buses. 

Savvy districts will assess the full array of funding options available through the federal government, their state government and utility and then look for opportunities to stack and phase grants to bring down costs. For example, the US Environmental Protection Agency's Clean School Bus Program is offering $5 billion in funding through 2026 that can be used to pay for buses, chargers and more. 

In addition, financing can help leverage the expected lifetime operating savings of electric buses (such as lower maintenance and fueling costs) to address upfront costs. Financing can be paired with public grants for greater project scale and quicker fleet transitions and can come from traditional private sector sources or from new sources such as a state or local green bank.

Electrification introduces new assets, roles and responsibilities to the business of operating school buses, like the ownership and management of chargers and associated infrastructure and software. 

Different arrangements of these roles and responsibilities constitute distinct business models that school districts may select to govern whether they own, lease or contract out for vehicles and how operator and maintenance functions are staffed. 

School districts should consider how new business models and financing options for electric buses and charging infrastructure might enable their electrification plans, for example, by taking advantage of new revenue streams or passing risk to other parties.  

Things to do: 

  • Research federal, state and electric utility funding opportunities 
  • Research potential revenue streams from environmental credits (e.g., low-carbon fuel standard credit markets) or from participation in utility programs (e.g., demand response) 
  • Ask your utility about incentive programs 
  • Run a total cost-of-ownership calculation 
  • Evaluate emerging business models, such as charging-as-a-service 

Questions to consider: 

  • What are the timelines, eligibility and reporting requirements (e.g., vehicle scrappage, operation status) of any upcoming funding opportunities? 
  • How might you stack and phase funding and financing options for both buses and chargers? 
  • Do you have a green bank or other innovative financing option available? 
  • Which roles and responsibilities associated with electric school buses are well-suited to your district? Which, if any, would be better addressed by a third-party service provider? 

Potential stakeholders: 

  • District transportation director 
  • District business and budgeting staff 
  • District grant writer 
  • District superintendent 
  • Electric utility representative 
  • School bus contractor (if applicable) 
  • Federal and regional Environmental Protection Agency staff 
  • State or local green banks 
  • Philanthropic or other local funders 
  • Manufacturers/dealers/as-a-service companies 
  • Community or technical partners with expertise in transportation electrification