Both the U.S. and Europe have made commitments to reduce emissions to mitigate the impacts of climate change and pave the way toward a cleaner energy future. Europe seeks to reduce net greenhouse gas emissions by at least 55% by 2030 and become a climate-neutral continent by 2050. Meanwhile, the U.S. is targeting reducing greenhouse gas emissions by 50% to 52% below 2005 levels in 2030 and achieving a net-zero emissions economy by 2050.
Transitioning to electric vehicles is an important piece of meeting these goals. Greenhouse gas emissions from transportation account for about 28% of total U.S. emissions, making it the largest contributor. Road transportation is also a major contributor to emissions in the EU.
To meet environmental targets and encourage the adoption of more electric vehicles, governments have allotted funding to help accelerate the transition in the form of purchase rebates, tax exemptions, and tax credits.
Europe has offered EV funding for some time, from its European Green Cars Initiative (EGCI) as part of its Economic Recovery Plan launched in November 2008, to its European Green Vehicles Initiative (EGVI) from 2014 to 2020 and current tax benefits and incentives for drivers and charging infrastructure. These policies have made Europe a frontrunner in the adoption of electric vehicles.
The U.S. seeks to follow Europe’s lead with its 2022 Inflation Reduction Act (IRA). While individual electric cars and commercial fleets can get tax incentives, EV growth depends on the available charging infrastructure as well. Drivers can’t rely on EVs unless there are enough fueling stations. That’s why the U.S. also developed its National Electric Vehicle Infrastructure Program (NEVI). EV charge point operators (CPOs) have a chance to take advantage of these funding opportunities to offset project costs while helping enable more EV adoption in the United States.
Available EV charging subsidies in the U.S.
National Electric Vehicle Infrastructure Program (NEVI)
The $5 billion NEVI Program is part of the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) signed into law by President Biden in November 2021. IIJA commits $7.5 billion of federal funding to build out a national electric vehicle charging network to reduce climate-changing greenhouse gas emissions. In an effort to help make EV chargers and alternative fueling facilities accessible to all Americans, the NEVI Formula Program provides funding to strategically deploy electric vehicle charging stations and establish an interconnected network to facilitate data collection, access, and reliability.
Funding is available for up to 80% of eligible project costs including the acquisition, installation, and network connection of EV charging stations to facilitate data collection, access, and reliability; proper operation and maintenance of EV charging stations; and
long-term EV charging station data sharing.
Key qualifying criteria for NEVI funding
To be eligible for NEVI funding, CPOs need to meet the following conditions:
- EV charging stations must be non-proprietary, allow for open-access payment methods, be publicly available, or available to authorized commercial motor vehicle operators from more than one company.
- Sites must be located along a Federal Highway Administration (FHWA) designated Alternative Fuel Corridor (AFC), a national network of electric vehicle charging and hydrogen, propane, and natural gas fueling infrastructure along national highway system passageways. If a state and department of transportation determine that all AFCs have been fully developed, then the state can propose alternative public locations and roads for EV charging station installation.
- Typically, stations must be no more than 50 miles apart along freeways and highways, and one mile from a freeway exit or highway roadway.
- Each DC fast charge station will have a minimum of four 150-kW combined charging system (CCS) connectors and a total station power of 600 kW.
- States are required to emphasize equity, with at least 40% of NEVI benefits going to disadvantaged, low-income, rural and tribal communities.
CPOs and other EV charging station owners stand to realize key advantages from NEVI funding. In all, NEVI’s EV incentives provide an important funding opportunity to get money to build your EV charging business.
The Inflation Reduction Act (IRA)
In August of 2022, The Inflation Reduction Act (IRA) was signed into law, offering federal tax credits to businesses that invest in renewable energy, energy storage and Alternative Fuel Vehicle Refueling Property.
Renewable energy and energy storage
The IRA offers renewable energy and energy storage credits to help with the upfront costs of these systems, further enhancing their value.
- Solar: The IRA extended the 30% solar investment tax credit (ITC) for commercial systems (that meet prevailing wage and apprenticeship requirements) with options for a production tax credit and other “adders” for siting in low-income areas or using domestic content to further increase tax benefits.
- Energy storage: The IRA also extended the ITC for stand-alone solar projects that are charged with grid electricity. Now, whether the battery energy storage system is charged with grid or solar energy, if it’s over 5 kWh, it’s eligible for a base rate of 6% tax credit, up to 30% if it meets prevailing wage and apprenticeship requirements. EV battery recycling can provide additional value. Note that using recycled EV batteries can further increase ROI and sustainability advantages. Second-life EV batteries still maintain 70-80% of their capacity. Using such batteries from Sparkion can reduce BESS cost-per-kWh by as much as 60% while cutting CapEx cost to half of competitive solutions.
Adding solar panels or batteries to your EV charging site can have many advantages for site owners, such as:
- Cost-effective electricity
- Decreased operating expenses
- Increased sustainability
- Reduced reliance on the grid
- Higher customer throughput
- Greater profits
Alternative Fuel Vehicle Refueling Property
Businesses that install electric vehicle recharging properties may also be eligible for this additional credit. If your business installs qualified vehicle refueling and recharging property, including electric vehicle charging equipment, it may be eligible for:
- A credit for qualified refueling property subject to depreciation equals 6% with a maximum credit of $100,000 for each single item of property (for each charging port, fuel dispenser, or storage property).
- Businesses and tax-exempt entities that meet prevailing wage and apprenticeship requirements are eligible for a 30% credit with the same $100,000 limit.
Qualified property includes charging stations for 2- and 3-wheeled electric vehicles (for use on public roads) and includes bidirectional charging equipment. Property must be placed in service in a low-income community or any population census tract that is not an urban area.
Key advantages for site hosts
EV charging station site hosts stand to benefit from both the NEVI and IRA programs.
- Offset project costs
- Attract new EV customers and increase existing customer satisfaction
- Increase new sources of revenue
- Become a part of the national EV charging network
- Remain one step ahead of the competition
- Meet your sustainability goals and establish a green reputation
Maximize benefits from EV subsidies with smart energy management
As CPOs invest in renewable energy, battery energy storage systems, EV chargers and other assets while also participating in EV incentive programs, it’s imperative that site devices work together optimally to optimize operations in light of government EV subsidies. EV smart energy management software and systems can help CPOs overcome site issues and achieve business goals to ensure reliable, cost-effective, sustainable EV charging to help enable the electric transition.
An energy management system (EMS) can allow communication and control among site assets via sensors and meters, a controller and cloud-based software for ideal energy deployment and energy consumption. Furthermore, a battery management system (BMS) serves as the brains of the batteries managing and monitoring charging and discharging for safe and efficient operation of the battery pack. Installing both enables communication with and coordination of your onsite renewable energy and storage systems to help you realize the most benefits from your clean energy investment.
For example, you can choose to schedule charging sessions to coincide with periods of high renewable energy generation, and then discharge later to offset the costs of grid power. You can even decide where to direct generation, such as splitting it between DC fast chargers and the on-site C store.
Making progress but plenty of opportunity remains
To date, all 52 states have submitted plans for the NEVI program, indicating their interest and commitment in providing EV infrastructure to ensure a convenient, affordable, reliable, and equitable national network. Some successes so far just in 2024 include:
- First NEVI-Funded EV Charging Station Opens in Kentucky: The station is conveniently located at a centralized Circle K. It features the Combined Charging System (CCS1) connector while the SAE J3400 (North American Charging Standard (NACS) connector will be added later this year to ensure all types of current and future EV makes and models can use the station as needed. It’s a great first step in helping the state become a leader in building out reliable EV charging infrastructure and staying on track with its goal of reaching net-zero emissions by 2050.
- Rhode Island’s First NEVI-Funded EV Charging Stations Opens: The stations were opened at two Park & Rides, fully building out its I-95 alternative fuel corridor with convenient, reliable, and affordable charging every 50 miles, allowing the state to use its remaining NEVI funding to continue buildout of public charging infrastructure in communities and along corridors outside of its designated AFC.
- First NEVI Funded EV Charging Station Opens in Utah: The station is conveniently located amid the iconic red rock formations of Moab near Arches National Park giving those exploring the desert the ability to charge their vehicles despite the remote nature of the destination. The state expects to double its current fast-charging capacity by the year’s end with 15 new sites funded through NEVI.
- First NEVI Funded Charging Station Opens in Vermont: The four ports in downtown Bradford will complement two existing 50-kilowatt DC fast chargers and a single AC Level 2 charger. Bradford is the first of 15 locations in this phase of NEVI funding that the stats is working to have under contract by the end of the year.
- First NEVI Funded EV Charging Station Opens in Maine: The eight Tesla Supercharger ports at a shopping center in Rockland, ME, support EVs with SAE J3400 and CCS connectors. These stations mark progress toward achieving the state’s climate goals, including a renewable portfolio standard of 80% by 2030 and 100% by 2050.
- First NEVI Funded EV Charging Station Opens in Hawai’i: The four 150-kW chargers at a Park & Ride on the island of Maui are just the start of its plans for more stations on Oahu, Hawai’i, and Kauai.
- Pennsylvania Continues Shift Toward Thriving Electric Transportation Sector: Pennsylvania’s first NEVI EV charging station opened in a historic mining town southwest of Scranton at a Pilot Travel Center. Conveniently located just two miles from the Scranton Airport, the station will serve travelers and locals and provide EV drivers with four charging ports capable of providing at least 175 kW each, and up to 350 kW of power each depending on power sharing requirements. While charging, customers can access restrooms, Wi-Fi, food, beverages, and other convenience items 24/7.
There are now nearly 192,000 publicly available charging ports in the U.S. NEVI plans reported so far cover designated corridors along roughly 75,000 miles of the 230,000 miles in the National Highway System, leaving plenty of opportunity for state departments of transportation to work with CPO partners to continue to build internal capacity and successfully administer the NEVI program.
As with Rhode Island, many states anticipated they will achieve build-out of their AFCs in future years and have funding remaining for additional capacity or deploying stations in non-AFC locations. The Joint Office estimates up to $3.5 billion of the $5 billion could remain after build-out.
With algorithms aligned with your business goals, Sparkion is here to enable your clean energy to move your operations forward. Sparkion and its partner network can also help energy service companies, fueling stations, convenience stores, retailers and others to plan for EV charging along federally designated AFCs for charging infrastructure. We can help you navigate the fine print and local regulations and ensure you maximize your EV incentives for a smooth transition to EV charging.
