Written on: February 5, 2021
In our last blog article, we talked about what we have and what we need in the way of demand for renewable propane. We covered, among other topics, propane vs. electric incentives as well as potential growth in demand for autogas. We’ll continue this discussion here, for Part 2.
The Department of Energy (DOE) and others offer renewables research and development grants through its National Labs. The work is carried out by academic institutions and private companies. The availability of these programs depends on annual appropriations from the U.S. Congress.
The propane industry has started to make some progress in this space. PERC and NPGA recently re-engaged with the Vehicles Technologies Office (VTO) and the propane industry was part of a pledged 55 projects for $139 million to advance innovative vehicle technology. The propane share of that pledge totaled over $9 million. This is a good example of the propane industry’s focus on propane engine technology. Now we need to convert that type of success into the renewable propane market for the residential and commercial uses of renewable propane.
Currently there is a Federal Fuel Tax Credit in the form of the Alternative Fuel Tax Credit for propane autogas that amounts to approximately 37 cents per gallon. This is another incentive that is directed at engine fuel rather than the residential and commercial markets. Let’s be frank here: the autogas market for propane is a small percentage of the overall propane market. More effort needs to be put on gaining incentives for the use of renewable propane in other market sectors.
For example, dsireusa.org catalogs incentives for renewables and efficiency by state. In Michigan, for example, 73 programs encourage the use of renewables and the installation of high efficiency energy equipment. While very few of these programs apply to renewable propane, the stage is set for increased awareness, increased demand and an increase in credits and incentives programs across the industry and across the country.
Several states and individual electric utilities in the United States have established special rates for purchasing electricity from certain types of renewable energy systems. These rates, sometimes known as feed-in tariffs (FITs), are generally higher than electricity rates otherwise available to the generator. FITs are intended to encourage new projects of specific types of renewable energy technologies.
Consumers in nearly every state can purchase green power, which represents electricity generated from specific types of renewable energy resources. Most of these voluntary programs generally involve the physical or contractual delivery of the electricity generation resource to the customer or utility.
Several federal and state requirements and incentives are in effect for the production, sale and use of ethanol, biodiesel and other fuels made from biomass. The federal Energy Independence and Security Act of 2007 requires that 36 billion gallons of biofuels be used in the United States per year by 2022.
Several states have their own renewable fuel standards or requirements. Other federal programs provide financial support and incentives for ethanol and other biofuels producers. Many states have their own programs that support or promote the use of biofuels. The DOE’s Alternative Fuel Data Center is a source of information on these types of programs.
Corresponding with the National Propane Gas Association (NPGA) and the Propane Education & Research Council (PERC) can help place emphasis on the importance of accelerating—and creating—more in the way of incentives and parity where renewable propane is concerned.