A Roadmap to Securing Federal Funding for Grid and Fleet Upgrades

February 27, 2024

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Fleets across the U.S. are rapidly accelerating their electric vehicle (EV) deployments. Driven by a combination of policy, regulatory, and market forces, an estimated 26.4 million EVs are expected to be on the road by the end of the decade, and projections indicate that they could make up more than 25% of electricity demand by 2050. That would represent the largest source of new load growth for electric grid operators already facing concerns about capacity, reliability, and sustainability in a changing climate.

Grid and fleet upgrades are clearly more important than ever, but high initial costs can pose a daunting challenge to even the most forward-looking organizations. Thankfully, federal funding for clean transportation and energy projects is abundant — if you know where to look, and how to secure it.

Information Overload

The Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) represent the largest ever investments in decarbonizing the American economy, and an enormous opportunity for state and local governments, utilities, and commercial entities to fund grid and fleet upgrades. But this opportunity is spread across dozens of agencies and hundreds of individual programs. From the U.S. Department of Energy (DOE) to the Delta Regional Authority, exploring the possibilities offered by unprecedented billions of dollars in new funding can quickly become overwhelming.

With so many programs across so many different agencies, each with its own set of eligible applicants, priority projects, and unique proposal requirements — not to mention government-wide directives like the Justice40 Initiative — having a roadmap is critical to know where you’re going and to make sure you don’t miss anything along the way.

A Good Navigator

It also helps to have a good navigator like GNA, a TRC Company and the leading consultant connecting grants, rebates, loans, credits and tax incentives to the clean transportation and energy industry. To illustrate, consider how we might navigate the following funding journey, connecting both grid and fleet upgrades to help a community unlock the full potential of BIL and IRA.

Suppose our example community would like to replace old diesel school buses with battery-electric versions. There are several programs that might be a fit, starting with the U.S. Environmental Protection Agency’s $5 billion Clean School Bus program, which focuses on replacing existing buses with zero- and low-emission alternatives. Another possibility might be the DOE’s Office of State and Community Energy Programs $500 million Renew America’s Schools program, which funds a wide range of energy efficiency and renewable energy improvements, including alternative fuel vehicles.

Transitioning a fleet to EVs also requires an operator to consider how and where to charge them. Both the previously mentioned programs will fund charging stations in addition to vehicles, but there are also many other possibilities. In particular, the U.S. Department of Transportation’s $1.25 billion Charging and Fueling Infrastructure (CFI) program and $5 billion National Electric Vehicle Infrastructure (NEVI) program, which provide historic levels of funding to grow the nation’s charging network. A good navigator will point out that to be eligible for either program a station must be publicly accessible, and that NEVI, even though it’s a federal program, is allocated and administered by state agencies.

Upgrading the school bus fleet is just the beginning of the journey. The local utility will also want to consider the effect on the electric grid and may consider pursuing some of the staggering $36 billion available for grid modernization and resilience upgrades through the Grid Deployment Office at the DOE. This includes $2.5 billion in grants to deploy transformational transmission and distribution technology solutions, specifically for electric grid operators, energy storage operators and electricity generators; $3 billion in grants for smart grid projects that increase the flexibility, efficiency, and reliability of the electric power system by increasing grid capacity, integrating renewables at the transmission and distribution level, and integrating “grid-edge” devices like EVs and electrified buildings; and $5 billion for collaborative projects that use innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability.

Roadside Attractions

This journey can also take some interesting paths. Grid operators may not expect to look to the U.S. Department of Agriculture to help support the fleet of electric school busses in our example, but if they are serving a rural community then the Empowering Rural America opportunity could be an option. This $9.7 billion program funds improvements to generation and transmission systems and supports the purchase or deployment of new renewable energy systems in rural areas. Another creative path opens if any of the schools are designated emergency shelters. Solar photovoltaic systems and local microgrids could serve as a secondary power source, helping to increase charging capacity for buses while also contributing to overall community resilience. An innovative project like this might be able to leverage funding from the Federal Emergency Management Agency’s (FEMA) $6.8 billion for community-wide disaster preparation and mitigation activities, which they are authorized to use “to provide incentives that encourage low-carbon or net-zero energy projects.”

Finally, if fleet and/or grid operators in the example community are feeling particularly innovative, they could consider complimentary initiatives as well. Passed around the same time as BIL and IRA, the CHIPS and Science Act provides multiple opportunities for both workforce development and advanced energy technology demonstration and commercialization projects. A good navigator can help grid and fleet operators access these opportunities through partnerships with local community colleges, research universities, or national laboratories.

Next Steps: Think Big and Move Quickly

While the funding available thanks to BIL and IRA may be unprecedented, it isn’t unlimited. More importantly there’s not much time to take advantage of the opportunity. Most recurring programs expire in less than a decade, and many of the largest initiatives will have just a couple of chances to apply — some of which have already passed.

Having success with these opportunities is mostly a matter of thinking big, having a plan, and giving yourself lots of chances to get that first big win.

We work with clients including utilities, cities, ports, and fleet operators on projects ranging from sustainable fleet development to strategic program development and grid modernization initiatives. Our team of funding and incentives experts, communications specialists, engineers, and government relations strategists collaborate with clients to build the market for low- and zero-emission transportation technologies and fuels. Find out more here.

By coordinating grid and fleet upgrades through cross-sector collaborations and public-private partnerships, we support our clients in pursuing projects that result in transformational, rather than incremental benefits. Those are the kind of projects that are much more competitive with federal agencies trying to do as much good as possible with limited time and resources, and the kind of projects that will win funding from BIL and IRA.