When it comes to alternative fuel incentives, one of the biggest mistakes a fleet manager can make is waiting for a better deal to come along. Incentives are vital to increasing the number of alternative fuel vehicles on the road. However, ensuring that fleets take advantage of such subsidies is equally as important.
State legislators feel pressure to enact policies that support clean air and clean water initiatives. They often target transportation because it's an area where they can generate quick results in terms of cleaner air. Fleet managers need to understand that legislators measure the success of incentive programs by how much the initiatives are actually utilized.
Incentives break down into three categories: tax credits or rebates, low-interest loan programs and tax exemptions. For private fleet managers, tax credits and rebates are preferred because they help reduce the upfront cost of conversion. Low-interest loan programs help public agencies that are on a fixed budget with the upfront costs. Exemption from state fuel or wheel taxes is often added into the state incentive package to offer more incremental savings over time.
Furthermore, fuel providers should work on both ends of the incentive process. They should be talking to legislators during policy development and then work with fleets in the implementation phase. When a fleet manager is thinking about a conversion, it's the fuel provider's job to ensure the fleet takes full advantage of the incentives and is not leaving any money on the table.
New incentives rolled out this year across several Western states, for example, and they should be on the radar of fleet managers and fuel providers operating in the region.
Utah consistently leads the way in alternative fuel legislation, and a new program signed into law offers to pay 50% of the conversion cost immediately. This will be highly effective because the fleet manager will only pay half up front, and the state will reimburse the conversion provider for the remainder.
Washington is another state that instituted an up-to-50% tax credit this year, but unlike Utah, this credit is taken during annual filing of state taxes. What makes it unique is a group of competing alternative fuel providers came together to support a fuel-neutral bill. It passed in a true bipartisan effort and was recently signed into law.Â
In Oregon, the state legislature lifted a sunset date and forged ahead with its Clean Fuels Program, which aims to institute a carbon exchange program to promote and support fleets using low-carbon fuels.
Incentives like these send a message to companies. The firms want to see state investment in alternative fuels that mirrors corporate interest and investment. Ultimately, companies are looking for the state to make the alternative fuel conversions easier. Without support from the state, companies are far less likely to move forward with alternative fuels. Â
With excellent incentives for fleets to make the switch to alternative fuels in place across the region, the time to convert is now. By working closely with an alternative fuel provider, fleet managers can ensure they're taking full advantage of existing programs.
The final step after conversion is for fleet managers to reinforce the benefits of incentives by telling their story to legislators. If the success of incentives is based on utilization, this is key to ensuring the future of incentives in your state.
The Alternative Fuels Data Center website is a great resource to see which alternative fuel incentives are currently available across the U.S.
Darren Engle is director of governmental relations for Blue Star Gas, one of the West Coast's largest propane distributors. An expert in alternative fuels who has worked in the propane industry for more than 25 years, Engle lobbies for propane autogas and other alternative fuels throughout the Pacific Northwest. He can be reached at dengle@bluestargas.com.
