The transportation sector is a leading source for greenhouse gas emissions in the U.S. To address this, the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) authorized over $10B in funding to reduce those emissions, including $7.5B in the BIL towards the establishment of a national charging network and $3B from the IRA to further support development of the charging network and procurement of low and no emissions vehicles. The IRA also expands tax credits and financing programs that support transportation electrification projects.
Total U.S. Greenhouse Gas Emissions by Economic Sector (2022)
Total U.S. Greenhouse Gas Emissions by Source (2022)
BIL and IRA Priority Programs to Consider
Charging and Fueling Infrastructure
The Charging and Fueling Infrastructure (CFI) Grant Program provides funding to strategically deploy publicly accessible electric vehicle (EV) charging infrastructure and other alternative fueling infrastructure. The program has two sub-categories: a community program and a corridor program.
The community program supports the installation of EV charging and alternative fuel in locations on public roads, schools, parks, and in publicly accessible parking facilities, while the corridor program deploys similar infrastructure along designated alternative fuel corridors.
The most recent CFI Notice of Funding Opportunity (NOFO) was open from May 30 to September 11, 2024 and included funds for FY 2024 and FY 2025. The BIL authorized $700M for FY 2026, which is subject to appropriation by Congress.
The Local Infrastructure Hub’s Transformative Project case story on Athens’ CFI Community Program project is available online.
Low or No Emission
The Low or No Emissions (LowNo) grant program provides funding to state and local government authorities for the purchase or lease of zero-emission and low-emission transit buses, as well as acquisition, construction, and leasing of required supporting facilities.
The most recent NOFO for LowNo was open from February 8 to April 25, 2024. The 2024 NOFO combined the LowNo competition with that for the Bus Facilities Competitive Program. Approximately $1.1B in funding awards for FY 2024 (competed for in the aforementioned NOFO) were announced in July 2024.
The BIL authorized $1.1B for both of FY 2025 and FY 2026; this funding is subject to Congressional appropriation.
Greenhouse Gas Reduction Fund
The Greenhouse Gas Reduction Fund (GGRF), created by the IRA, is a $27B investment to mobilize financing and leverage private capital for clean energy and climate projects that reduce pollution across the country with a special focus on ensuring these benefits reach low-income and disadvantaged communities (LIDAC).
GGRF consists of three separate, but complementary, programs – two of which are relevant for transportation electrification projects: the National Clean Investment Fund (NCIF) and the Clean Communities Investment Accelerator (CCIA).
The Environmental Protection Agency has awarded contracts and obligated funds to coalitions who will distribute GGRF funding via local clean energy programs and community lenders.
Recipients of GGRF funding will be using innovative financing mechanisms, including but not limited to:
- Direct lending for projects,
- Credit enhancements, like loan loss reserves or loan guarantees,
- Loan aggregation for greater risk diversity,
- Co-investment as subordinated debt, and
- Issuance of green bonds.
The Local Infrastructure Hub’s Introduction to the GGRF is available online.
Note: In some cases, GGRF financing can be leveraged to capture Direct Pay tax credits, defraying the cost of capital.
Direct Pay
As part of the IRA, the federal government developed a new financial tool called Direct Pay (also called Elective Pay) to incentivize clean energy investments. Direct Pay provides direct financial assistance, via tax rebates, to cities, non-profit organizations, and other tax-exempt entities to defray the costs associated with a range of clean energy investments.
Direct Pay projects do not have a competitive component and thus may be more accessible for cities unable to pursue or win competitive grant awards for these projects.
Relevant elective pay eligible tax credits for transportation electrification projects include:
- Credit for Qualified Commercial Clean Vehicles
- Alternative Fuel Vehicle Refueling Property Credit
These tax credits are eligible through December 31, 2032.
The Local Infrastructure Hub has explored how communities are preparing for or beginning to take advantage of Direct Pay opportunities through our Transformative Project case stories. Learn more about how Madison, WI and Denver, CO are strategizing for Direct Pay. Additionally, Local Infrastructure Hub partner organization, the National League Cities, laid out how the communities of Alexandria, VA; Morrisvile, NC; and Williamsfield, IL are leveraging the IRA’s Direct Pay opportunities to advance their unique sustainability and resiliency programs in a July 2024 article.
Other Programs to Consider
This list prioritizes identified programs and funding options with the greatest resources for transportation electrification projects. It is not intended to be exhaustive of all programs that may have funding for transportation electrification projects.
Local community and project leaders should consider additional programs that provide for direct or indirect investments in transportation electrification, including, but not limited to, the FTA’s Bus and Bus Facilities, National Electric Vehicle Infrastructure (NEVI) Formula Program, Port Infrastructure Development Program (PIDP), and RAISE.
Turning Transportation Goals Into Projects
From the outset, local communities should assess the current status of EV adoption in their community, as well as conduct a gap analysis to understand the financial, workforce, and infrastructure needs to achieve local goals. Such analyses should account for the full lifecycle costs of investments in transportation electrification, including long-term savings relating to reduced fuel and maintenance costs. A March 2024 study commissioned by Natural Resources Defence Council (NRDC) found that over the typical 7-year life of a vehicle, EVs provide for substantial savings compared to internal combustion engine (ICE) vehicles. Understanding local needs, potential savings, and positioning in the EV transition can inform a strategic approach to federal funding opportunities.
Many cities across the country have prepared climate action plans, including transportation electrification goals through fleet transitions and increased public access to charging infrastructure – also known as electric vehicle supply equipment (EVSE). Any city in the early stages of EV adoption and investment should leverage their local climate action plan to set goals for their community’s transportation electrification transition and build a roadmap toward achieving those goals.
Read more about turning your goals into projects
In Boise, Steve Hubble, the City’s Climate Action Manager, noted the potential for aligning investments in community charging infrastructure with efforts to electrify municipal fleets – acknowledging that CFI-funded chargers installed at City facilities could have the potential to support fleet charging. By aligning these investments in planning discussions, Boise and other communities are maximizing the impact of dollars invested in charging infrastructure.
For cities without a climate action plan and/or transportation electrification roadmap, early public engagement is particularly important to understand community charging needs and potential solutions, both of which will inform the funding strategy. This may involve engagement through traditional and non-traditional means:
- Anchor institutions and other large employers can be partners in the effort,
- Local or regional utility providers will inform the power grid capacities and needs, and
- Workforce development entities and other community based organizations can facilitate relationships to ensure equitable project delivery and maximize the economic impact.
If these partnerships can be established, they can strengthen applications for discretionary funding by showing prioritization of Justice40 and environmental justice goals.
Community and Stakeholder Engagement
Infrastructure projects are investments that impact and benefit the broader community and are always best when done in concert with the community.
Review how your city can master community & stakeholder engagement
In the planning stages, community engagement can help with identifying and prioritizing needs and ensuring that concerns are addressed; early community engagement is about both listening and educating. Intentional community engagement can lead to projects and solutions that are collaborative rather than prescriptive. Throughout the project, updates and milestones should be communicated to residents through engaging storytelling, regular communication, and a meaningful feedback loop. Highlighting the progress being made both keeps the community aware of transportation electrification investments and may encourage residents to consider EV adoption themselves.
In addition to engaging with local community members, all transportation electrification projects require comprehensive partnership with the local electric/power utility and industry stakeholders. All charging infrastructure, for public or private usage, will require evaluations of existing grid conditions and potential upgrades to the system to ensure sufficient power. To maximize impact and encourage further EV adoption, charging infrastructure must be resilient and dependable; EV adoption requires consumer confidence in the availability of reliable charging infrastructure. The current grid conditions, and potential for future upgrades, may dictate the available locations for charging stations; public officials also need to factor these engineering concerns against equitable distribution of station locations. Local utilities can provide great insights into these factors and support local governments as they consider how and where to locate publicly accessible EVSE. Utilities typically have large vehicle fleets and may also consider electrifying their fleets, if they are not already doing so. Local government and community leaders can play a role in convening the appropriate stakeholders to support these efforts community wide. Fostering a larger scale EV transition across multiple agencies and entities should result in a more comprehensive charging network and potential economies of scale.
State Departments of Transportation (DOTs) can be critical partners to local entities in this work as well as they can provide access and support for state-based funding sources and NEVI formula funds. NEVI formula funds can cover up to 80% of eligible project costs, including for the acquisition, installation, operation, and maintenance of EV charging stations as well as for data sharing.
State DOTs offer various programs to support local entities leading transportation electrification projects. For example, the State of Michigan has stood up a number of programs through the state’s Department of Environment, Great Lakes and Energy (EGLE) intended to support local governments, as well as public and private organizations. Charge Up Michigan is a first come, first serve opportunity that supports organizations and entities that are currently or could host EV charging infrastructure. Awards cover the lesser of 33.3% of the total cost or a direct match of the amount the electric utility is paying, up to $70,000. Additionally, California established the $30M Charging Infrastructure for Government Fleets program in December of 2023 to “Support electrification of government fleets in California by providing reliable and readily accessible electric vehicle charging infrastructure dedicated for these fleets.” In Texas, the Texas Emissions Reduction Plan (TERP) Rebate Grants Program provides rebates and grants to support projects reducing emissions. Through the program, local governments and businesses can tap into available funding to purchase or lease electric or hybrid vehicles and install EVSE.
In other states, like Georgia, large utilities are providing support to a variety of entities, including local governments, to advance EVSE deployment projects. Georgia Power, the largest electric utility in the state, offers the Make Ready Infrastructure Program that helps eligible entities prepare for EVSE installation by covering the cost of electrical infrastructure upgrades, which can be a great help for various entities as it reduces the upfront costs of electrification.
Discussions with award recipients and others leading transportation electrification projects reveal the important role that anchor institutions – educational and medical institutions, major employers, etc. – have to play in charging infrastructure investments. These local and regional actors typically have a few characteristics that set them apart as critical players in transportation electrification projects:
- Large real estate footprints,
- Significant workforce across a region, and
- Own vehicle fleets that can transition to electric.
As referenced above, partnering with these anchors and other partners with large fleets (and resources) can help broaden the reach and impact of local efforts to build out charging infrastructure and hasten the EV transition.
Deputy Service Safety Director, Andrew Chiki, played a pivotal role in the Athens’ successful CFI application development and leaned heavily on a number of local or regional anchor institutions. For example, Chiki participated in Ohio University’s (OU) Transportation Working Group, and through the partnership between the city and OU, OU will be hosting four of the charging stations funded through the city’s $12.5M CFI award. These locations are near the OU Heritage College of Osteopathic Medicine, which provides health services for low-income residents and is part of the community’s medical corridor serving the larger region.
Assembling the Capital Stack
Capital for transportation electrification projects includes a diverse mix of formula and competitive grants, tax credits, and loans via various intermediaries, including, but not limited to, federal agencies, GGRF, and state DOTs. These capital sources can be stacked together in various ways. For example, state and local sources (e.g., municipal bonds) can be leveraged as the local match to tap into federal funds, and GGRF finance products can be used as bridge finance towards the monetization of direct pay eligible tax credits.
Review our Capital Matrix
While it may vary slightly by program, in general, federal funds can only cover up to 80% of the total cost of a project. That said, GGRF financial products can be leveraged to cover the non-federal cost share. Additionally, in some cases, tax credits can be used with grant-funded investments; however, this varies by program and credit.
As with any federal opportunity or investment, it is crucially important for local governments to coordinate across internal offices and agencies, such as the finance and procurement teams, to ensure all considerations are being applied.
Executing Transportation Electrification Projects
In the early days of fleet transition, the field is experiencing at least three big buckets of demand-side challenges related to project delivery:
- Upfront cost of EVs,
- Availability of charging infrastructure and requisite grid capacity, and
- Building the EV workforce.
These challenges manifest in different ways across communities. In smaller more spatially distributed communities, a lack of charging infrastructure can hinder wide-spread adoption of EVs. For low-income and disadvantaged communities (LIDACs), the upfront costs of EVs and EVSE can be a barrier for many. Across all communities, workforce presents a challenge as new training programs and workforce pipelines are being built to provide the expertise necessary to install charging infrastructure and to service both that infrastructure and the new EVs.
Strategies for execution and how other cities are doing it
To encourage more residents to make the transition to EVs, Milwaukee, like many communities, is prioritizing charging infrastructure sites where residents do not have the ability to charge at home, be it due to costs-related barriers, insufficient grid capacity, or lack of property ownership in the case of renters or residents of multifamily housing units.
Similarly, Standing Rock Renewable Energy Power Authority, (also known as SAGE) in the Sioux Reservation in North Dakota, received $3.9M to install eight direct-current fast charger (DCFC; aka, level 3 chargers) charging stations at community gathering spots, where Tribal members can access services. SAGE is a member of the Electric Nation’s network that is working with Tribal nations across five states to plan and install EVSE aligned with each community’s unique needs and priorities.
Another common concern is the lack of access to charging at multifamily and apartment developments given that residents may not have control over property-related investments necessary for EVSE. The New Jersey Department of Environmental Protection (NJDEP) made this a point of emphasis in their CFI application, and was awarded $10M in January 2024 to increase access to EVSE equipment in multifamily housing developments.
The planned location of charging stations can also shape the path to funding, particularly if the charging stations can, or will be, proximate to designated alternative fuel corridors. If so, then local project leaders should consider CFI’s corridor program and/or NEVI-formula funding options, which are distributed by states and subject to State Plans for EV Charging. In some cases, to maximize funding opportunities and eligibility, local leaders should work to design projects around designated alternative fuel corridors, maximizing the amount of eligible funding opportunities.
Equity considerations can also influence siting decisions; discretionary grants for charging infrastructure and EV deployment fall under the Biden Administration’s Justice40 program, which targets federal investments towards underserved communities. Furthermore, the IRA’s Direct Pay credits have bonuses based on equity considerations, and the GGRF’s programs also emphasize equity objectives.
To build an EV-fit workforce, many cities and communities are partnering with local educational institutions and workforce development partners to support local economic growth while supporting the broader transition in the community. This is a critical component to the EV transition given the differences between traditional internal combustion vehicles and battery-electric vehicles.
In Boise, the CFI award will support collaborative development and execution of a workforce development program, targeted to those historically under-represented in electrical work, including women, minorities, people with disabilities, and formerly incarcerated individuals. This will include partnerships with local unions and colleges to increase awareness of and access to good-paying jobs. The program will consist of three primary activities:
- Stakeholder engagement, with partners like the local chapter of the IBEW, the Idaho State Department of Labor Apprenticeship Program, and College of Western Idaho’s Electrician Apprenticeship Program,
- Development and execution of an education and outreach campaign to introduce the work associated with EVSE installation and the gaps in the workforce to apprentices and prospective students of the apprentice programs, and
- Hosting an annual Electric Vehicle and Electric Vehicle Infrastructure Job Fair to bring together employers, professionals, and prospective professionals to learn more about ongoing and necessary work to support the EV transition.
In Madison, the Engineering Division’s GreenPower Program, which prepares participants for employment opportunities in solar and electrical industries, will be supporting the department’s work in installing charging infrastructure – investments that are being supported by the IRA’s new direct pay provisions.
Accelerator for America would like to thank Drexel University Nowak Metro Finance Lab for their partnership in production of this resource for the Local Infrastructure Hub.
