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EPA doubles electric school bus funding to almost $1B after overwhelming initial demand

The Environmental Protection Agency (EPA) announced Thursday that the agency will almost double its funding for electric school buses to close to $1 billion after school districts from all 50 states applied for rebates.

Electric school buses are quickly taking over streets around the US as school districts and state leaders see how they can benefit the communities they serve in.

According to Dominion Energy, a power provider promoting the use of EVs for a cleaner and sustainable future, replacing one diesel bus can reduce greenhouse gas emissions by 54,000 pounds annually.

With help from Dominion’s initiatives, the second largest electric bus fleet in the US just crossed 500,000 service miles. By implementing EV buses, Virginia school districts were able to avoid 447.7 short tons of greenhouse gases.

These toxic fumes are known to creep into the bus’s interior while the bus is idling, harming the health of students taking them every day. A 2002 Yale study found dangerous particle levels were five to ten times higher while buses were stopped.

Although new standards have come along since then, it’s still not enough to limit the exposure when you can cut it out altogether.

Not only do electric school buses produce zero emissions, but they can also save school districts money on fuel and repair costs in the long run. For example, The Modesto Unified School District in California, which ordered 30 Blue Bird EV school buses, expects to save $250,000 a year on fuel.

With federal and many state funding options, there’s never been a better time to convert to an all-electric school bus fleet.

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Lion Electric EV school buses Source: Lion Electric

EPA doubles funding for electric school bus fleets across the US

The EPA Clean School Bus Program, part of the Bipartisan Infrastructure Law, provides $5 billion in funding for electric school buses through the next five years.

The first round of funding, announced in May, was supposed to free up $500 million, but after overwhelming demand from school districts across all 50 states, the EPA will now be almost doubling it to $965 million.

The EPA received about 2,000 applications, amounting to nearly $4 billion in funding, with over 90% submitting for zero-emission electric school buses. Sue Gander, director of the electric school bus initiative at the World Resources Institute, highlights the demand for fully electric options, claiming:

There’s more to the story. The overwhelming demand for electric school buses, over any other fuel type, is striking. Applicants across the country chose electric buses over propane at a rate of 10 to 1. There’s no doubt we’re entering a new, electric era in student transportation, one with massive benefits for our kids’ health, climate and the economy.

With requests for over eight times the initial funding round, EPA Administrator Michael S. Regan said on the program’s success thus far:

America’s school districts delivered this message loud and clear – we must replace older, dirty diesel school buses. Together, we can reduce climate pollution, improve air quality, and reduce the risk of health impacts like asthma for as many as 25 million children who ride the bus every day.

The EPA said it’s “moving swiftly” to review applications and expects the list of winning applicants to be released in October 2022. Applicants will be selected through a lottery-based system.

Another $1 billion round of funding for electric school buses will be in the Fiscal Year 2023, according to the EPA. The agency plans the next funding program to launch in the next few months, including a grant competition.

However, more may need to be done. Senator Carper, chair of the senate committee on environmental and public works, talks about the need for further funding, saying:

Given the response to the availability of these dollars, it’s clear that more funding is needed. I look forward to working with Administrator Regan, the rest of the Biden Administration, and my colleagues in Congress to build on this progress so that more communities can realize the clean air and energy saving benefits of these cleaner vehicles.

Will we have access to more funding for electric school buses? Time will tell. If the initial demand is any indication, school districts are ready and willing. It’s time to get the funding to make it happen.

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Avatar for Peter Johnson Peter Johnson

Peter Johnson is covering the auto industry’s step-by-step transformation to electric vehicles. He is an experienced investor, financial writer, and EV enthusiast. His enthusiasm for electric vehicles, primarily Tesla, is a significant reason he pursued a career in investments. If he isn’t telling you about his latest 10K findings, you can find him enjoying the outdoors or exercising