Connecticut Targets Lower Income Buyers With New Clean Vehicle Subsidies
by Carolyn FortunaCriticized — like so many other states — for subsidizing purchases of mostly higher-end EVs, Connecticut has drafted the Electric Vehicle Roadmap. Soon more folks than ever in the Nutmeg State will have incentives for buying an EV with the forthcoming revised clean vehicle subsidies. The draft is a way for Connecticut to determine how best to incorporate used vehicles into its existing program as well as to attract more low- to moderate-income purchasers.
A $1,500 level rebate has been in place since October, 2019, when funding for the program, called the Connecticut Hydrogen and Electric Automobile Purchase Rebate Program, or CHEAPR, was running low. The state Department of Energy and Environmental Protection decided to lower the rebates to stretch the funding out until 2020.
Connecticut’s CHEAPR pilot program is currently transitioning to a new version established under Public Act 19-117 which will offer rebates for both new and used electric vehicles. The EV Roadmap focuses on pathways to achieve wide-scale EV deployment. As a comprehensive plan, it will drive reductions in harmful criteria pollutants from the transportation sector, help the state meet federal health-based air quality standards, and mitigate communities’ exposure to mobile air source toxicants.
Connecticut suffers from some of the worst air quality in the country, especially along heavily traveled transportation corridors where criteria air pollutants are most densely concentrated. The state’s transportation sector is also responsible for 38.1% of the state’s GHG emissions. In planning for GHG reduction, the Governor’s Council on Climate Change identified transportation electrification via wide-scale EV deployment to be among the primary solutions for achieving the state’s statutorily required economy-wide GHG reductions targets of 45% and 80% below 2001 levels by 2030 and 2050, respectively.
Key focus areas of Connecticut’s EV Roadmap are public and private fleets; medium- and heavy-duty vehicle electrification; expanding EV charging infrastructure; consistency of the consumer charging experience; minimizing grid impacts through demand reduction measures; demand charges; innovation; building codes and permitting requirements; education, marketing, and outreach; Volkswagen EVSE; and leveraging incentives to promote equitable, affordable EV adoption.
A large number of the 100+ public comments about the Electric Vehicle Roadmap lamented the low financial return, especially as compared to neighboring states.
“They’re terrible,” said Barry Kresch, one of the leaders of the EV Club of Connecticut. The Sierra Club’s data supports Kresch’ reaction, as Connecticut’s $1,500 maximum return is well below New Jersey, New York, and Massachusetts. Those states offer new vehicle rebates ranging from $2,000 to $5,000.
Staff at the Connecticut Department of Energy and Environmental Protection defended the base rebates, taking into account that the state is adding used vehicle rebates and income-eligible supplements this year. “We don’t know how that’s going to be taken up and subscribed,” Paul Farrell, the agency’s director of air planning, noted.
The Electric Vehicle Roadmap describes that, over 5 years, new levels of funding will support between 13,000 and 16,000 rebates — depending on price trends, availability of federal incentives, and economic conditions. The proposed used vehicle rebates under consideration by the board are $750 for used plug-in hybrids and $2,000 for used battery vehicles.
Those rebates would be dedicated to single-person households with an adjusted gross income under $50,000 as well as to family households with incomes under $75,000.
A Sampling of Clean Vehicle Subsidies for Lower Income Individuals
Noting that clean transportation offers “many health and environmental related benefits,” California offers up to $9,500 in the Clean Cars 4 All program. This venture helps get lower-income consumers into cleaner technology vehicles by retiring their older, higher-polluting vehicles and upgrading to cleaner vehicles. Participants also have the option to replace their older vehicles for alternative mobility options such as public transit passes. The program is limited to vehicle owners residing in participating air districts and those who meet income and vehicle requirements.
The Oregon Clean Vehicle Rebate Program has two types of subsidies on the purchase or lease of electric or plug-in vehicles. The first is the Standard Rebate, which gives drivers $1,500 to $2,500 back for the purchase or lease of a new battery electric vehicle or plug-in hybrid — regardless of their income levels. The second program is the Charge Ahead rebate. This program gives qualified lower income households a $2,500 rebate when they purchase or lease a new or used battery electric vehicle, if they can demonstrate that their income is low enough to qualify.
Both rebates are available to Oregon residents who have bought EV or hybrid plug-in vehicles on or after Sept. 28, 2019.
Xcel Energy serves 3.3 million electricity customers in 8 states — Minnesota, Michigan, Wisconsin, North Dakota, South Dakota, Colorado, Texas, and New Mexico. It intends to help put 1.5 million electric cars on the road in those states by 2030. It will do that by promoting electric cars, providing rebates for people who buy an electric car, helping customers install residential EV chargers, and expanding the public charging network for electric cars.
It will also develop time-of-use programs that will allow EV owners to save money on the electricity they use to charge their cars during times when electricity rates are lowest. Part of the program will be targeted toward low-income drivers in underserved communities.
Final Thoughts
The federal electric vehicle tax credit program provides a tax credit as high as $7,500, depending on the vehicle chosen and an individual’s tax circumstances.
In addition to a potential federal EV tax credit, EV buyers may also qualify for credits, rebates, or other incentives offered by state and local governments. Sometimes a local electricity provider may kick in some incentives or discounts. In most cases, the local incentives can be combined with the federal program to get more than $10,000 in savings.
Some, like Green Mountain Power in Vermont, offer a modest additional rebate of $1000 for low- and moderate-income customers on new or used EVs. This would be applicable for 1 person households making $50,000 or less, and 2+ person households making $96,122 or less.
Others, like Maine, are funding EV rebates from innovative sources, such as the settlement of a lawsuit against Volkswagen for violating Maine’s environmental protection laws. The settlement specifies that funds be used for environmentally beneficial purposes, such as the reduction of vehicle pollution, and Maine offers qualified low-income residents a $3000 return on a battery electric vehicle.
Increasing EV rebates for lower income individuals as Connecticut is attempting to do means ensuring that incentives are evenly distributed across a range of demographics, especially income. These individuals are the most likely to be influenced by clean vehicle subsidies, according to a study at UC Davis, because incentives reduce the financial impact of buying an EV. Of course, outreach around EVs in general as well as EV purchase incentives are essential aspects of efforts to increase their deployment.
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