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When you made your New Year’s Resolutions this year to be proactive and grow your business, were you thinking about providing EV charging to your customers? You can’t open up a newspaper without finding another article about the government incentives and tax credits that the federal government, various utilities and different states are offering to support the expansion of the supply of charging services to electric vehicles – a fundamental requirement if the nation wants to accelerate the transition to electric vehicles. But so many programs, so much information can be overwhelming. We’ve compiled here the key points to help you understand how much your company can save by using the different EV charging incentive programs.
President Biden has passed the Inflation Reduction Act reviving the EV charger federal tax credit for EV charging stations and equipment that had expired in 2021. Extending the credit for another decade, from January 1, 2023 through December 31, 2032, businesses may be eligible under the 30C Alternative Fuel Infrastructure Tax Credit for a 30% tax credit of up to $100,000. Applicants for what is commonly referred to as the “federal tax credit” must be located in designated census tracts and follow prevailing wage standards.
Before the Act, meaning all projects that were completed before the end of 2022, the limit on the credit was $30,000; under the new law, business installation projects to be completed after 2022 that meet the criteria will be eligible for a tax credit per property item of up to $100,000 per EV charger.
According to the instructions that appear on the IRS website, applicants should use Alternative Fuel Vehicle Refueling Property Credit Form 8911 to calculate the credit due for alternative fuel vehicle refueling property that they placed in service during the tax year. If the credit can be attributed to depreciable property, i.e. the property was designated for business or investment purposes for refueling operations, then it is treated as a general business credit.
In parallel to the tax credit on charging equipment, President Biden’s $900 billion EV charging station investment plan announced in September 2022 targets construction of 100 million EV charging stations in thirty-five states along 53,000 miles of national highway.
In addition to the federal EV charging tax credit, there are also a variety of state and regional incentives for EV charging. For example, the State of California offers an Electric Vehicle Charging Station Financing Program that grants loans to small businesses for the design, development, purchase, and installation of EV charging stations at small business locations across the state, including a rebate of 10-15% of the project with a loan cap of $500,000. New York offered an EV tax rebate of up to $5,000 to offset charging equipment investments made through the end of 2022.
Similarly, Connecticut aims to expand the development of EV infrastructure to accommodate increased EV adoption by offering rebates to offset equipment and installation costs, including Level 2 charging stations and direct current fast chargers (DCFCs) for light-duty EVs. Via the CT EV Charging Program, local utilities in the state have incentivized the installation of EV charging equipment for their commercial and industrial electric service customers. The amounts, terms and availability of incentives vary from state to state.The Department of Energy’s Vehicle Technologies Office (VTO) supports a variety of projects aimed at lowering the cost and increasing the convenience of EVs. Additionally, businesses can make use of a searchable database on the website of the U. S. Department of Energy that identifies state tax credits and rebates also aimed at offsetting or reducing EV charger and EV charging expenses.
In addition to the many incentives in the United States, there are also great opportunities across the Northern border. According to Green Economy Canada, the EV Charger Incentive Program reimburses up to 50% of total eligible project costs including both equipment, services and related costs, with total funding of up to $100,000 per applicant; a new round of funding is to open in 2023.
With climate issues becoming more serious, the need to transition to green energy is ever more urgent; your business can both grow its profits and contribute to the environment by adding EV charging stations as an additional stream of revenue, a hook to attract your clients to sit down and stay for a while, reinforcing their relationship and loyalty.