We are seeing more vehicle manufacturers develop electric vehicles (EVs), emphasizing the urgent need for EV infrastructure, specifically more charging stations. Without more charging options, the transition to EVs may slow the adoption.
Financial incentives, such as tax credits and government funding, help encourage businesses and municipalities to invest in EV infrastructure. These incentives help lower the upfront costs, making EV infrastructure projects more feasible and helping deploy more EV charging stations. Understanding the eligibility criteria for these tax incentives and funding opportunities is essential for fleets looking to develop EV infrastructure.
Importance of Investing in EV Infrastructure
The reason we are seeing more EVs on the road is not just because more EV technology is being developed, but because there is also a growth in environmental awareness and more government policies. Global EV sales have surged, with many countries setting goals to phase our internal combustion engine (ICE) vehicles over the next two decades. Even with these targets, there is still a lack of EV infrastructure.
Governments are setting goals to help address this issue. The Biden administration has set goals to have half a million EV chargers across the United States by 2030. We are also seeing private companies invest in EV charging networks.
Tax incentives and funding programs can help increase the number of EV charging networks as they lower any financial barriers to investing in EV infrastructure. Both federal and state governments offer various incentives to encourage businesses and municipalities to install EV chargers. As we continue seeing the demand for EVs grow, these tax incentives will be key for helping close the EV infrastructure gap.
Types of Tax Incentives for EV Infrastructure
It may seem challenging to understand what tax incentives are available fully, but there are currently several types of incentives available for businesses and municipalities to invest in EV infrastructure:
- Federal Tax Credits
One popular example is the Alternative Fuel Vehicle Refueling Property Credit, which offers businesses up to 30% of the cost of installing EV charging stations. Eligibility depends on factors such as the location of the infrastructure, the type of charging equipment installed, and the size of the business or municipality applying. - State and Local Incentives
Many states offer tax credits and incentives to encourage more EV infrastructure. Currently, California, New York, and Colorado are leading the charge in support for EV charging station installations. - Investment Tax Credits (ITCs)
For larger projects, Investment Tax Credits (ITCs) are available. They can help reduce the taxes associated with EV infrastructure, making it more attractive for fleets to install charging stations. Eligibility for ITCs depends on different variables, such as specific project scopes and timelines, so be sure to research further to confirm whether your fleet qualifies.
These three incentives are crucial to helping reduce the financial hurdles and support the growth of EV infrastructure for fleets.
Maximizing Your EV Infrastructure Investment
With a project with such a high price tag, you want to ensure you maximize your investment. One way to do so is to combine incentives for even more funding. For example, fleets can combine federal tax credits with state grants and local funding programs to reduce upfront costs.
Organizations are also encouraged to engage with their public agencies and utilities to learn if there any additional resources and funding opportunities:
- Public Agencies
Public agencies may offer rebates or assistance with site selection and permitting processes. - Utilities
Utilities can assist with infrastructure development, including funding for charger installations or upgrades.
To ensure you are aware of all potential incentives, fleets should thoroughly research available programs in their area. If you want to feel confident you have researched every possible opportunity, reach out to industry experts who can help ensure your fleet secures the best opportunity and incentives available.
