Electric Vehicle Charging Infrastructure

With the IRA, Congress and the Administration took significant steps to spur the creation of a national network for charging electric vehicles, including tax credits for rural and low-income communities to expand charging infrastructure.

In denser urban environments, many people lack a driveway or garage to charge an EV. Historically excluded communities are much less likely to have the kind of dedicated parking where overnight charging from one’s own outlet is possible. Innovation and investment are needed to extend charging opportunities to those who cannot charge at home.

1. Make sure the charging tax credit (30C) is being applied as broadly as possible so things like the bollards, upfront EVSE software costs, the private sector costs that have to be paid to utilities in the utility-side make-ready process, landscaping, trenching, on-site storage, ADA compliant upgrades, and any other directly applicable costs are included. Promoting on-site renewable energy with battery backup directly for charging through combined incentives, providing clarity and education to utility entities.

2. Charging infrastructure investments should be prioritized for long term impact, not rapid obsolescence, with regards to flood prone areas. Site analysis for long-term flooding and sea level rise vulnerability should be required prior to federal funding awards.

3. Consider costs altogether for the entire charging system when implementing charging tax credits. These costs should include technologies with the potential to reduce overall systemic costs with respect to electrical generation, transmission, and distribution (i.e. on-sight storage, multiport vehicle chargers, demand response mechanisms, grid services, etc.). Base tax credit eligibility on gross project cost before factoring in incentives from utilities, states, or other entities. This allows the stacking of incentives to further discount the final cost of the infrastructure installation. Since these tax credits are primarily designed to support EV charging buildout in low-income and rural communities, this will leverage other programs to maximize the support and benefits to these communities.

4. Ensuring transportation electrification is prioritized over other alternative fueling projects. Additionally, ensure investments include projects outside major corridors, and includes a multi-modal approach (e.g. e-bikes, e-scooters, etc).

5. Ensure that eligibility is clear for businesses, individuals, non-profits, and other tax-exempt entities interested in taking the credit. The Joint Office should support education and outreach efforts to support implementation of the credit.

6. Produce guidance regarding workforce development to help entities meet the prevailing wage incentive of the credit. Provide guidance around apprenticeship programs.

7. How Treasury and the IRS define “eligible census tract” will have an enormous impact on how many individuals can access the tax credit for residential or commercial EV chargers reauthorized by the Inflation Reduction Act (IRA) Section 30C. The National Resources Defense Council (NRDC) wrote an analysis to ensure that “eligible census tract” will be distributed as widely as possible; see recommendation at the end of the document.

30C “eligible census tract” Recommendation:

The law makes census tracts designated as “urban” by the Census Bureau ineligible for the tax credit. However, the Census Bureau does not actually designate tracts one way or the other. It defines census blocks as “urban” or “rural” and there are on average approximately 100 blocks in a tract.

Accordingly, Treasury and the IRS must designate which tracts will be eligible based on the Census Bureau’s designation of blocks. The range of legally permissible outcomes is vast. For example, it may seem logical to define a tract as urban if more than half of its blocks are urban, but an analysis by the Natural Resources Defense Council (NRDC), provided by NRDC for the purpose of RFI Notice 2022-56, shows that this would unduly deny eligibility to tens of millions of people who live in rural census blocks that happen to be located in a census tract with many urban blocks. Additionally, to ensure all Americans living in rural areas are eligible, Treasury could define “urban” as a tract as one comprised entirely of urban blocks. This would ensure that no rural communities are left out, but could be seen as not sufficiently targeting the most underserved rural areas.

However, NRDC’s analysis found that, “a census tract in which no more than 25 percent of census blocks are classified as rural by the Census Bureau” would significantly increase eligibility relative to a 50 percent threshold. Such a definition is within the intent and spirit of the law to help low-income and rural communities, as it would prevent 58 million people from being unduly denied eligibility under the non-urban designation (including 2 million rural residents, 4 million people in poverty, 4 million Black people, and 6 million Hispanic/Latino people).

We urge Treasury and the IRS to establish a defensible definition that maximizes eligibility, consistent with the Administration’s guiding principle of “ensuring that as many eligible taxpayers as possible benefit from the incentives provided by the law while protecting against fraud and abuse.”