Incentives, Grants and Tax Credits: Helping Drive the Adoption of NGVs

As natural gas becomes an increasingly viable alternative to gasoline or diesel in fleet transportation, more countries around the world are offering natural gas vehicle (NGV) tax credits, grants and incentives, enabling a more affordable transition for fleet managers and individuals. These measures are offered by governments - many at the state or provincial levels – as well as by non-governmental agencies. 

In Sweden, the government recently announced the extension of an incentive until 2016 whereby company car buyers receive a 40 per cent reduced tax rate. This makes the cost of NGVs competitive with gasoline or diesel-powered vehicles in that country.

According to the U.S. Department of Energy (DOE), in recent years, state incentives, including tax credits, grants, and rebates, have supported the deployment of natural gas vehicles and the associated infrastructure. In addition, certain state laws and regulations, such as fleet acquisition requirements, have increased the number of NGVs on the road.

The DOE’s Alternative Fuels Data Center offers a database which allows users to search for natural gas laws and incentives in every state. In addition, the advanced search narrows the parameters even further. Also, the page called   Incentive and Law Additions by Fuel and Technology Type, allows visitors to select specific fuel types and view natural gas incentives and laws according to a specific fuel.

In 2012 alone, over 35 new incentives and laws related to natural gas were added to the database.

In Pennsylvania, the Department of Environmental Protection is leading the Natural Gas Vehicle Program, which was recently widely reported in the media.  The Alternative Fuels Incentive Grant program is currently offering an estimated $10 million in grants. It offers:

An opportunity to propose projects which will convert or purchase natural gas vehicles weighing less than 14,000 pounds as well as convert or purchase electric, propane, or other alternative fuel vehicles of any size.

Pennsylvania is joined by several other states in offering financial incentives to invest in NGVs: Maryland, New York, Wisconsin, Colorado, California, Texas, Oklahoma, Louisiana and West Virginia are a few states which also offer programs. Some states, like Texas, offer programs which cover up to 80 per cent of the incremental cost of an NGV; others like California, offer various programs which open periodically when funds are available.

Keith Leech, fleet manager with the City of Sacramento is also the area’s Clean Cities coordinator and chairman. He says the Federal alternative fuel excise tax credit of 50 cents per gallon has enabled his city to double its natural gas fuel infrastructure.

“I’m not sure we could have done it without it,” Leech says.

The City of Sacramento currently operates 100 liquefied natural gas (LNG) refuse trucks with four LNG dispensers.

“We’ve been running natural gas garbage trucks for over 10 years and it’s going great,” he says.

His city also just received a $600,000 grant from the California Energy Commission and he says the number of public fueling stations is also increasing.

In Canada, British Columbia’s FortisBC, the largest investor-owned distribution utility in Canada, has initiated the FORTIS Natural Gas for Transport Incentive Program: they offer incentives for heavy, medium and light duty vehicles.  The government of BC has also recently extended its Clean Energy Vehicles for BC program, which includes incentives for CNG vehicles.

In China, the government has long supported natural gas vehicles by offering incentives at the local and central levels. Since 2006, the country has offered a range of programs aimed at promoting natural gas-based clean transportation for the purpose of reducing emissions, saving energy and ensuring national energy security.

For current information about incentives near you, visit Westport’s new incentives chart: http://www.westport.com/products/engines/15/tax-credits-and-incentives.

Have you been successful in receiving a grant or tax incentive? Tell us about it!