Step 1.3: Research Funding and Financing Options
Overview
There are many ways to bring down the upfront costs of electric school buses. School districts can assess the full array of funding options available through the federal government, their state government and utility. Then, they look for opportunities to stack and phase grants and use tax credits to bring down costs.
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, including grants and tax credits
- Research private and public funding opportunities explicitly earmarked for enhancing equity and disability access
- 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
Ways to include equity:
- Use local, state or federal environmental justice screening tools to identify areas of disparity within the district
- Take advantage of funding programs that offer additional funding for wheelchair lifts, ramps, and other accessibility features
- Pursue state and federal funding opportunities prioritizing disadvantaged communities
- If your district is well-resourced, consider partnering with less-resourced districts to enhance grant opportunities with a larger fleet and secure better procurement deals
- Create partnerships to ensure that the economic benefits of electric school buses – such as maintenance and charging infrastructure investments – stay in your communities
Questions to consider:
- What are the timelines, eligibility and reporting requirements (e.g., vehicle scrappage, operation status) of any upcoming funding opportunities?
- Are you eligible for vehicle or charger tax credits?
- 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?
- Are there any potential fines or project penalties associated with failure to provide equitable access for students with disabilities?
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
- Organizations with expertise in transportation electrification, such as Clean Cities and Communities Coalitions
Resources:
- All About Funding and Financing Options for Electric School Buses – WRI's Electric School Bus Initiative: This webpage is a hub for everything a school district needs to know about funding and financing electric school buses.
- All About Total Cost of Ownership (TCO) for Electric School Buses – WRI's Electric School Bus Initiative: This article defines TCO of an electric school bus and features a helpful TCO calculator.
- Clearinghouse: Electric School Bus Funding and Financing Opportunities – WRI's Electric School Bus Initiative: This downloadable tool features a compilation of many of the existing electric school bus funding and financing opportunities.
- Flipping the Switch on Electric School Buses: Financing Discussions – U.S. Department of Energy Alternative Fuels Data Center: A 6-minute video on how to prepare for electric school bus financing discussions.