by Julia Pyper
November 10, 2018

Electric buses offer a way to clean up the air in communities and mitigate carbon dioxide emissions, all while saving bus operators money. But those buses come at a premium, which can deter cities, schools, business and other potential buyers from making the switch.

A recent report by the U.S. PIRG Education Fund notes that electric transit buses cost roughly $200,000 more than diesel buses, but the lifetime fuel and maintenance savings of an electric transit bus amounts to around $400,000. Electric school buses cost roughly $120,000 more than their diesel counterparts, but can save $170,000 over their lifetime. So the potential savings are significant, but the upfront purchase price is a barrier.

To overcome that hurdle, the PIRG report recommends that transit agencies and school districts explore using financing mechanisms such as municipal bonds and local option transportation taxes. Bus operators can also take advantage of federal, regional, state, and local grant and incentive programs. For instance, Pioneer Valley Transit Authority and Martha’s Vineyard Transit Authority in Massachusetts are using Volkswagen “Dieselgate” settlement funds to purchase electric buses. In some places, bus operators may be able to use a cap-and-trade policy to generate revenue for clean transportation.

Agencies and school districts may also be able to use vehicle-to-grid technology to offset their electric bus costs. In that scenario, electric bus batteries equipped with vehicle-to-grid technology can provide services to the grid by storing up electricity and selling it back to system at times of high demand.

In addition, cities and schools can partner with local utilities to obtain beneficial rate structures to help them save on charging costs. Bus operators an also work with utilities to secure investments in charging infrastructure.

Transit agencies and school districts are already putting these financing tools to work — from Dallas, Texas to King County, Washington to White Plains, New York. Several more have taken steps to electrify their bus fleet in recent weeks. At the same time, utilities and bus manufacturers have introduced new programs and products to better serve the electric bus market.

Here’s a look at the latest electric bus news to leave the station.