How to maximize alternative fuel tax credits
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Electric vehicle infrastructure is rapidly becoming a key part of modern business strategy, offering a range of financial incentives that can significantly reduce costs and enhance sustainability efforts. From tax credits to government rebates, companies investing in EV charging solutions are finding themselves at an advantage. Some of these benefits even repeat annually, providing consistent financial relief.
Beyond just saving money, businesses are positioning themselves for long-term success by embracing alternative fuel technology. To fully capitalize on these opportunities, it's essential to understand the various forms of alternative fuel tax credits and how they apply to your operations. Whether your business is located in the U.S. or Canada, it’s crucial to leverage every incentive available to maximize profitability.
To begin, it’s important to identify which incentives you qualify for. When people hear the term "alternative fuel," they often think of electric vehicles, but the U.S. and Canadian governments recognize a broader spectrum of power sources. These include biodiesel, renewable diesel, hydrogen, natural gas, and ethanol. While EVs dominate the market, the current landscape heavily favors businesses focused on electric vehicles and their supporting infrastructure.
The type of business you run plays a pivotal role in accessing these incentives. The Alternative Fuel Infrastructure Tax Credit (AFITC), for instance, targets those who install EV chargers and other alternative refueling stations, such as in multi-family buildings or commercial parking lots. In these cases, the specific type of alternative fuel matters less than the actual infrastructure.
For example, if you're considering installing EV chargers, staying updated on state, provincial, and federal incentives can guide your planning. In the U.S., over 70% of the country offers EV charger rebates or incentives. Tools like ChargeLab’s Rebate Finder can help pinpoint incentives tailored to your business and location by simply entering your zip code and answering a few questions about your planned installations.
In Canada, the government proposed five new investment tax credits in 2023 to promote clean energy adoption. If approved, these measures would allow Canadian business owners to claim tax refunds for their alternative fuel infrastructure investments. Provincial programs, such as Alberta's MCCAC Electric Vehicle Charging Program, also offer substantial rebates for Level 2 and DCFC chargers.
Maximizing savings involves more than just tax credits. Combining them with other rebates can lead to greater overall financial benefits. Prescriptive rebates provide fixed amounts per unit installed, while point-of-purchase rebates are more common for residential projects. Make-ready rebates offset installation costs for Level 3 chargers, and turnkey rebates cover both materials and installation. Additionally, case-by-case rebates and grants can further reduce costs.
As the global push towards cleaner energy continues, expect more legislation to emerge offering additional benefits to business owners. Always consult with your tax professional to explore all potential credits and stay informed about rebates by regularly checking government resources.
With over 4.1 million plug-in hybrid and battery electric vehicles sold in the U.S. between 2010 and 2023, the demand for EV charging infrastructure is surging. Our data shows that 60% of EV drivers still rely on public chargers, even when home charging is an option. This presents a lucrative opportunity for forward-thinking business owners to enter this growing market while reaping financial rewards.
However, EV chargers alone aren't enough. You'll need robust software to manage and optimize your charging stations. ChargeLab's backend software powers leading EV charger manufacturers, installers, and network operators across North America. By transforming any OCPP device into a smart charger, we simplify operations for businesses. Ready to learn more? Contact the ChargeLab team today.
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By embracing alternative fuel tax credits and leveraging innovative software solutions, businesses can not only reduce costs but also contribute to a greener future.