The US Environmental Protection Agency (EPA) announcedthe availability of at least $500 million in funding from the Clean School Bus rebate competition. This second round of funding will build on the previous nearly $1 billion investment. (Earlier post.)

EPA’s Clean School Bus Program was created by the Bipartisan Infrastructure Law, which provides an unprecedented $5 billion of funding to transform the nation’s fleet of school buses. The Clean School Bus Program funds electric buses, which produce zero tailpipe emissions, as well as propane and compressed natural gas (CNG) buses that produce lower tailpipe emissions compared to their older diesel predecessors.

EPA’s 2022 Clean School Bus Rebate Program has awarded approximately $965 million to support the purchase of about 2,600 buses, 95% of which are electric. These rebates were awarded to approximately 400 school districts in nearly all 50 states and Washington DC, along with several federally recognized Tribes and US Territories. School districts identified as priority areas serving low-income, rural, and, or Tribal students make up 99% of the projects that were selected.

In April 2023, EPA announced the availability of at least $400 million in grants that will fund electric, propane, and compressed natural gas (CNG) buses that produce either zero or low tailpipe emissions compared to their older diesel counterparts. This application period is now closed and EPA anticipates announcing selections for the grant program this winter.

This year’s $500-million Clean School Bus Rebate Program will provide a combined funding amount to cover bus, workforce development costs, and infrastructure costs for awardees requesting electric school buses. Applicants can request up to $345,000 per bus. Selectees may be eligible for Inflation Reduction Act tax credits applicable to their bus and infrastructure purchases.

For example, the clean vehicle tax credits for qualifying school buses are worth up to $40,000. Narrowing the cost difference between clean school buses and diesel school buses remains an integral goal of EPA’s CSB Program and the agency adjusted electric school bus funding levels in this rebate program to help stretch funding further and drive down long-term electric school bus market costs.

The amount of funding per bus will depend on the applicant’s prioritization status, as well as the type and size of bus replacement(s) requested. EPA will prioritize applications that will replace buses serving low-income, rural, and Tribal communities. Large school districts with communities of concentrated poverty also will be prioritized if their application focuses on clean school buses serving those communities.

EPA is accepting rebate applications from 28 September 2023 until 31 January 2024.