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Stimulus Bill Provides Major Increase in Plug-in Vehicle Purchase Credit Program

The $787-billion stimulus bill (HR 1, the American Recovery and Reinvestment Act) that emerged from the joint House-Senate conference committee this week provides funds for a large range of transportation-related projects. It also made significant changes in the current plug-in vehicle tax credit program, including increasing the limit from a program total of 250,000 vehicles to a maximum of 200,000 plug-ins per manufacturer.

The US House of Representatives passed HR1 on Friday morning, on a partisan 246-183 vote. No Republicans voted for the measure, and seven Democrats voted against it. The Senate is expected to vote on the bill Friday as well.

Tax Credits for Plug-ins

Under current law, a credit is available for each new qualified fuel cell vehicle, hybrid vehicle, advanced lean burn technology vehicle, and alternative fuel vehicle placed in service by a taxpayer during the taxable year. In general, the credit amount varies based on technology, weight, fuel efficiency, and other factors. The credit generally is available for vehicles purchased after 2005. The credit terminates after 2009, 2010, or 2014, depending on the type of vehicle. The alternative motor vehicle credit is not allowed against the alternative minimum tax.

A credit is also available for each qualified plug-in electric drive motor vehicle placed in service—qualified being a four-wheel, on-road vehicle equipped with a grid-chargeable battery pack of at least 4 kWh capacity.

The base amount of the plug-in electric drive motor vehicle credit is $2,500, plus another $417 for each kWh of battery capacity in excess of four kilowatt-hours. The maximum credit for qualified vehicles weighing 10,000 pounds or less is $7,500.

This maximum amount increases to $10,000 for vehicles weighing more than 10,000 pounds but not more than 14,000 pounds, to $12,500 for vehicles weighing more than 14,000 pounds but not more than 26,000 pounds, and to $15,000 for vehicle weighing more than 26,000 pounds.

Once a total of 250,000 credit-eligible vehicles have been sold for use in the United States, the credit phases out over four calendar quarters.

The House bill made no provisions modifying the current credit. The Senate version made substantial changes, expanding the type of vehicles qualifying for a credit, adding a credit for PHEV conversions, and doubling the 250,000 vehicle limitation to 500,000.

The conference agreement follows the Senate version with substantial modifications. Provisions include:

  • A maximum credit of $2,500 is available for electric drive low-speed vehicles, motorcycles and three-wheeled vehicles.

  • A 10% credit, up to a maximum of $4,000, for the cost of converting any motor vehicle into a qualified PHEV. Minimum capacity of a qualified battery is 4 kWh. Plug-in conversions made after 31 December 2011 are not eligible.

  • The conference agreement limits the maximum credit to $7,500 regardless of vehicle weight. The conference agreement also eliminates the credit for low-speed plug-in vehicles and for plug-in vehicles weighing 14,000 or more.

  • The conference agreement replaces the 250,000 total plug-in vehicle limitation with a 200,000 plug-in vehicle per manufacturer limitation.

  • Changes to the plug-in credit are effective for vehicles acquired after 31 Dec 2009.

Department of Energy

EERE. The conferees agree to provide an additional $16.8 billion for the Department of Energy’s Energy Efficiency and Renewable Energy program, instead of $18.5 billion as proposed by the House and $14,398,000,000 as proposed by the Senate.

Funds under this heading include:

  • $2.5 billion for applied research, development, demonstration and deployment activities to include $800 million for projects related to biomass and $400 million for geothermal activities and projects.

  • $2 billion for Advanced Battery Manufacturing grants to support the manufacturing of advanced vehicle batteries and components, as proposed by the Senate, instead of $1,000,000,000 as proposed by the House. The conference agreement does not include the Advanced Battery Loan Guarantee program as proposed by the House. The Senate bill carried no similar provision.

  • $300 million for the Alternative Fueled Vehicles Pilot Grant Program (funding for the acquisition of alternative fueled vehicles or fuel cell vehicles, EPACT 2005, 42 USC 16071), instead of $400 million as proposed in the House bill. The Senate had originally proposed $350 million.

  • $400 million for Transportation Electrification, instead of $200 million as proposed in the House bill. The Senate proposed $200 million in report language.

Fossil Energy. The conferees agree to provide an additional $3.4 billion for the Fossil Energy Research and Development program, instead of $2.4 billion as proposed by the House and $4.6 billion as proposed by the Senate.

Funds under this heading include:

  • $1 billion for fossil energy research and development programs;

  • $800 million for additional amounts for the Clean Coal Power Initiative Round III Funding Opportunity Announcement;

  • $1.52 billion for a competitive solicitation for a range of industrial carbon capture and energy efficiency improvement projects, including a small allocation for innovative concepts for beneficial CO2 reuse;

  • $50 million for a competitive solicitation for site characterization activities in geologic formations; and

  • $20 million for geologic sequestration training and research grants.

The conference agreement does not include $2.4 billion for Section 702 of EISA 2007 (a provision to carry out fundamental science and engineering research on carbon capture and sequestration), as proposed by the House. The Senate bill contained no similar provision.

Innovative Technology Loan Guarantees. The conference agreement includes $6 billion for the cost of guaranteed loans authorized by section 1705 of the Energy Policy Act of 2005, instead of $8 billion as proposed by the House and $9.5 billion as proposed by the Senate. This new loan program would provide loan guarantees for renewable technologies and transmission technologies. The $6 billion in appropriated funds is expected to support more than $60 billion in loans for these projects.

Funds under this heading include $10 million for administrative expenses to support the Advanced Technology Vehicles Manufacturing Loan program. The House bill and the Senate bill included no similar provision.

General Services Administration

Energy-Efficient Federal Motor Vehicle Fleet Procurement. The conference agreement includes $300 million for the acquisition of motor vehicles for the Federal fleet as proposed by the Senate, instead of $600 million as proposed by the House. The conferees “remain hopeful” that domestically produced plug-in hybrid-electric vehicles will be commercially available in sufficient quantities before 30 September 30 2010, such that these funds could be used to acquire this technology for the Federal fleet.

Each vehicle purchased must have a higher combined fuel economy, as measured by EPA, than the vehicle being replaced and the overall government-purchased vehicles must have an improved fuel economy at least 10% greater than the vehicles being replaced.

Department of Transportation

The conference agreement provides $1.5 billion for supplemental discretionary grants instead of $5.5 billion as proposed by the Senate. The House did not include a similar provision. These funds are to be used to award grants on a competitive basis for projects across all surface transportation modes that will have “a significant impact on the Nation, a metropolitan area or a region.” Other funds under this heading include:

  • $27.5 billion for highway infrastructure instead of $30 billion as proposed by the House and $27.060 billion as proposed by the Senate.

  • $8 billion instead of $300 million as proposed by the House and $2.250 billion as proposed by the Senate for capital assistance for high-speed rail corridors and intercity passenger rail service.

  • $1.3 billion instead of $800 million as proposed by the House and $850 million as proposed by the Senate in capital grants to Amtrak.

Federal Transit Administration

Funds under this heading include:

  • $6.9 billion for transit capital assistance instead of $8.4 billion as proposed by the Senate and $7.5 billion as proposed by the House. Within the total amount, 80% of the funds shall be provided through the Federal Transit Administration’s (FTA) urbanized formula; 10% shall be provided through FTA’s rural formula, and, 10% shall be provided through FTA’s growing states and high density formula. In

  • $750 million for investment in fixed guideway infrastructure instead of $2 billion as proposed by the House.

  • $750 million for capital investment grants instead of $2.5 billion as proposed by the House. The funds will be distributed on a discretionary basis for New Starts and Small Starts projects that are already in construction or are nearly ready to begin construction.

Environmental Protection Agency

The amended bill provides $300 million for Diesel Emission Reduction Act (DERA) grants as proposed by both the House and the Senate.




At the end of the day, I'm hopeful that this will have a meaningful impact on the USA. However, I'm also skeptical & worried among other things that we're not going to get the quality of infrastructure and results envisioned due to cronyism & awarding contracts to the lowest bidders - where the contractors turn around and are able to get away with doing shoddy work for bigger money through legal wrangling of the contract language. We shall see.


Great. Looks like everybody's gonna be working for Big Brother. Eeek!


The impact will be significant
To the language.
"Earmarks" will be renamed "discretionary" and "green".
To society. Pelosi will run the auto industry to ensure it's prinary mission is “protecting and sustaining the health and pension benefits” of workers.
Californians will be able to ride mass transit to Las Vegas.
Working for big brother?
After big brother finishes taking 2 trillion from us .. .
We will be owned by big brother.


If my calcs are correct plug-ins can't get more than $1.9bn (.25m cars X $7.5k max ea) while the still mythical clean coal gets $3.4bn. I guess Washington listens to lobbyists more than they read GCC.


Clean coal isnt mythical china is building its first clean coal powerplant right now. The main features of clean coal are that it allows you to burn brown and green coals which conventional plants either cant burn or shouldnt burn and that it does indeed allow one to catch a portion of the co2 and alot of other pollution from the coal.


"Clean coal" is a myth. Not only is the potential CO2 reduction a fraction of what is produced, the greenwashing effect is just encouraging more mining and more coal plants. We need feed in tariffs and energy conservation and storage.

And to those wingeing about "Big brother" and spending money; we've just endured 8 years of tax cuts (spending) and the growth in the size of government as well as increased surveillance. At least a lot of this money is aimed at helping the middle class directly instead of waiting for some magical trickle down that never seems to happen.

I think this plan will put a lot of people in plug-in cars and really help begin the energy paradigm change we so desperately needed to begin years ago.


Concidering china and india will burn every gram of coal on earth sooner or later you best hope clean coal actauly does work.


You can burn coal "cleanely" by adding CCS but the problem is that you will consume betwen 10 and 20 more coal for the same energy because the separation, compression, transportation and ground injection of CO2 is not for free. 2nd you have to build a huge infrastructure of pipe to transport the CO2 from the power plant where to coal is burned to the storage location, where is the capital to build this infrastructure and much time it is going to take to build it ?. 3rd is there is no econmical value in capturing and storing CO2 why anybody would do it ? you have to find a way to generate value in storing CO2, either by using for oil recovery or by paying it with carbon credit and well enough so that it is profitable to do it.

There is experience pilot going on now but commercial product won't be available before 2020.

Most of plant already build can not be retrofited for CCS, only the plant that work on O2 instead of air can.

All this together makes it extremely unlikley that CCS wil play a significant role in fighting AGW.

At this point it seems easier to developp nuclear than CCS as odd as it might sound at first sight.


Coal will be burned until there are cheaper alternatives-- which may be soon. Even China is recognizing the economic cost (as well as social) of burning coal. More important, wind and solar are rapidly becoming cheaper to build and operate. Coal, like oil will grow more expensive as the easy to mine sources play out.


Ask the people in Kingston TN about "clean coal". Or the people living near a "mountain top removal" site. There is no such thing as clean coal. It is a myth.


The problem I have with "Tax Credits for Plug-ins" is that it is a 'technology specific' program and not a 'results based' program. They are specifying plug-ins in the belief it will save fuel, and currently it looks like it will. However that could change; when hybrids first came out they were fuel efficient and the gov offered tax credits for hybrids - but then the car companies made *performance* hybrids that were as wastefull in fuel as anything else. But these still qualified for the tax credit too.

A 'results based' program would just reward lower fuel consumption and let the market find which tech best does that.


Spot on al_vin. What they should do is give a tax credit for "novel" vehicles capable of greater than 100mpg equivalent over a 100 mile range (or some variation on that theme).

$2500 tax credit for the Aptera Type-2e. Yeah! :) That brings its effective price to between $22,500 and 37,500. Now make it available in Florida!


About clean coal: definitely money down the drain. The only form of "clean coal" I could ever concieve is coal seam methane where the process goes coal seam+water+residual heat+microbial activity->natural gas->extracted and pumped to power plant->burned

The coal seam effectively becomes a huge and inefficient geothermal power plant.


So, there's money in the stimulus package for Plug in hyprids? As far as passenger vehicles, I know of no plug-ins available. None, unless you convert a Prius using hymotion's product. And that demographic is mighty small

I'm all for plug-in hybrids, but this does not seem to be something for the stimulus package.

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