Federal Grants and Tax Incentives

Federal, state, and regional agencies often offer different grant or loan programs to encourage the transition to propane. Many grants and incentives are created to help facilitate the costs of the initial conversion process, whether that be for station equipment, vehicle conversion, or other costs. You can read more about some of the programs offered below.

Tax Incentives and Rebates

Like grants, federal, state, and regional agencies will sometimes put together incentives to complement and reward the conversion to alternative fuels. Some incentives and rebates can be applied yearly, and some are limited-time opportunities that have a due date. Check out some of the tax incentives and rebates below.

Federal Fleet Conversion
Grant/Loan Programs


Rural Energy for America Program
Due March 21, 2021

This program provides guaranteed loan financing and grant funding for renewable energy systems or to make energy efficiency improvements. Eligible entities are rural small businesses and agricultural producers.

 

State and Regional Conversion Grant/Loan Programs

Indiana Community Facilities Direct Loan & Grant Program
Rolling Deadline

Funds can be used to purchase, construct, and / or improve essential community facilities, purchase equipment and pay related project expenses. Eligible entities include public bodies, community-based non-profit corporations, and federally recognized Tribes. Eligible areas should have no more than 20,000 residents.

Indiana DieselWise
Opening Winter 2021

Funding for clean air projects that will significantly reduce diesel emissions from nonroad vehicles and equipment across Indiana. Both public and private entities that operate diesel powered equipment are eligible.

Ohio Community Facilities Direct Loan & Grant Program
Rolling Deadline

Funds can be used to purchase, construct, and / or improve essential community facilities, purchase equipment, and pay related project expenses in rural areas. Eligible entities include public bodies, community-based non-profit corporations, and federally recognized Tribes. Eligible areas should have no more than 20,000 residents.strong>

Ohio Diesel Emissions Reduction Grant
Opening Winter 2021

Funding for the replacement of diesel-powered public transit buses in ways that will significantly reduce diesel emissions in eligible Ohio counties.

Ohio Diesel Mitigation Trust Fund
Opening Winter 2021

Funding to replace or repower diesel on-road vehicles and off-road equipment.

 

Federal Tax Incentives and Rebates

Alternative Fuel Vehicle Refueling Property Credit
Yearly Credit for alternative fuel vehicle refueling property you placed in service during your tax year.

DERA School Bus Rebates
Opening Fall 2021
A rebate program that funds vehicle replacements or retrofits of old diesel school buses with new buses certified to EPA’s cleanest emission standards. Regional, state, and tribal agencies and public and private fleets are eligible. Rebate usually totals $20,000-$65,000 per bus depending on the fuel type of the replacement bus.

Alternative Fuel Excise Tax Credit
Rolling
A tax incentive is available for alternative fuel that is sold for use or used as fuel to operate a motor vehicle. A tax credit for $0.50 per gallon is available for propane and other alternative fuel-run motor vehicles. Eligible entities must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle.

State and Regional Tax Incentives and Rebates

Michigan Alternative Fuel Development Property Tax Exemption
Rolling
A tax incentive for an industrial property that is used for high-technology activities or the creation or synthesis of biodiesel fuel may be eligible for a tax exemption. Eligible industrial facilities must obtain an exemption certificate for the property from the Michigan State Tax Commission.

Michigan MPGA Propane Vehicle Rebate
Due December 31, 2021
$4,000 rebate payment that can be used for a new propane vehicle or propane conversion. Any 2015 or newer OEM vehicles converted to autogas are eligible.

Ohio OPGA Rebate
Due December 31, 2021
$1,000 rebate that can be used towards a new propane vehicle, new vehicle propane conversion or a new propane lawn mower. Eligible vehicles include new OEM propane vehicles, new propane conversion vehicles, new propane OEM lawn mowers, and new propane converted mowers.