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Propane

About Propane

Discovered in 1910 by Dr. Walter Snelling, propane gas is a clean-burning, high-energy alternative fuel that is used to power homes, vehicles, and generators. The Propane Education and Research Council (PERC) highlights propane milestones in the History of Propane. In 1958, national propane sales reached seven billon gallons annually for all applications of the fuel. In 1990, the Clean Air Act approved propane as a clean alternative fuel for vehicles. In 2004, propane became a $10 billion industry in the U.S.

Propane, which accounts for about two percent of the United States’ total energy, is used for home and water heating, cooking and refrigerating food, powering farm and industrial equipment, and powering vehicles. Propane typically costs less per gasoline gallon equivalent (GGE) compared to gasoline and diesel, and, according to PERC, the differential between prices in major markets has increased from $0.37 per gallon in 2010 to $1.12 per gallon in 2012.

The U.S. Department of Energy’s Alternative Fuels Data Center highlights the following Propane Fuel Basics: propane is used in vehicles as liquefied petroleum gas (LPG); it is often referred to as autogas when used as a fuel in internal combustion engines. Propane is a clean-burning, high-energy alternative fuel that is appropriate for light-, medium-, and heavy-duty vehicles. This colorless, odorless gas is stored under pressure inside a tank; once the pressure is released, the liquid vaporizes, and this vaporized propane is used for combustion. A GGE equals about 1.34 gallons of LPG.

Propane Vehicle Applications

The industry is ever-changing and new makes and models of vehicles available with propane options or conversion systems are regularly announced. Propane vehicles can be dedicated or bi-fuel.

Below is a list of markets with propane options currently available. The Alternative Fuels Readiness Workbook has resources to help identify available vehicles, engines, and conversions availabilities.

  • Light-duty vehicles, including models such as sedans, cargo vans, SUVs, and pick-up trucks
  • Heavy-duty vehicles:
    • Shuttle buses
    • Transit buses 
    • Street sweepers
    • Tractors
    • Vans
    • Vocational trucks

Click on the Vehicle Availability icon above to search for currently available propane vehicles, engines, and conversions.

Maintenance and Fueling for Propane Vehicles

There are maintenance-related aspects to consider when deploying alternative fuels into a fleet. Access to qualified technicians to service vehicles, modifications to existing on-site maintenance facilities, and access to adequate fueling stations are critical considerations.

The Alternative Fuels Readiness Workbook has additional guidance and resources regarding maintenance and fueling considerations. Click on the Alternative Fueling Station Locator icon to search for accessible propane fueling stations.

Cost Calculators

There are many tools available online to help calculate different aspects of natural gas vehicle deployment including petroleum reduction, return of investment, yearly savings, emissions, etc. The tools range in complexity, with the more basic calculators providing estimated savings and payback and more complex models addressing cost of ownership and emission reductions.

U.S. Department of Energy’s Vehicle Cost Calculator - Calculates total cost of ownership and emissions based on individual driving habits, comparing up to eight vehicle makes and models

Alternative Fuel Life-Cycle Environment and Economic Transportation Tool - Calculates a fleet’s petroleum use, cost of ownership, and air pollutant and greenhouse gas emissions

Other Savings Calculators
In addition to the two calculators highlighted above, a number of other companies offer propane vehicle savings calculators that fleets may find helpful. The calculators vary in level of detail, offering savings calculations ranging from capital and operating costs, fuel savings, and foreign oil dependency reduction. A list highlighting some of the companies offering propane cost calculators is included below:

Roush CleanTech

Alliance Autogas

Amerigas

American Alternative Fuel

Propane Vehicle and Infrastructure Incentives

There are a variety of incentives available to help offset the costs of purchasing propane vehicles, fueling equipment, and conversions, as well as to encourage the use of propane vehicles. Information about federal incentives and the incentives in Alabama, Georgia, South Carolina, and Tennessee are included below. Additional federal and state incentives for all types of alternative fuels can be found at the U.S. Department of Energy's Alternative Fuel Data Center as well as in Part 3: Policy of the Alternative Fuels Readiness Workbook.

Federal Propane Vehicle Incentives

  • Alternative Fuel Tax Exemption: The federal government provides a tax exemption on alternative fuels used in some nontaxable circumstances. Common nontaxable uses in motor vehicles can include: in a school bus, on a farm for farming purposes, in certain intercity and local buses, and exclusive use by a nonprofit educational organization. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuels. For more information, visit: http://www.afdc.energy.gov/laws/397
  • Improved Energy Technology Loans: The U.S. Department of Energy is providing loan guarantees to eligible projects that support early commercial use of advanced technologies, including AFVs that reduce air pollution and greenhouse gases. For more information, visit: http://www.afdc.energy.gov/laws/392
  • High Occupancy Vehicle (HOV) Lane Exemption: States are allowed to exempt certified low emission and energy-efficient vehicles from HOV lane requirements within the state. Eligible vehicles must be certified by the U.S. Environmental Protection Agency (EPA) and appropriately labeled for use in HOV lanes. The U.S. Department of Transportation is responsible for planning and implementing HOV programs, including the exemption criteria established by EPA. States that choose to adopt these requirements will be responsible for enforcement and vehicle labeling. The HOV exemption for low emission and energy-efficient vehicle expires September 30, 2017. For more information, visit: http://www.afdc.energy.gov/laws/law/US/386

Propane Incentives in the Southeast Region

Alabama Incentives

  • AlabamaSaves: Alabama businesses are provided one percent fixed rate financing for LNG/CNG or propane fleet conversions, lighting, HVAC, and other energy projects. As of April 2013, more than 20 loans have closed and nearly $17 million of funds have been deployed. For more information, visit: http://www.alabamasaves.com/Overview.aspx
  • Local Government Energy Loan Program: The Alabama Local Government Energy Loan Program (LGELP) provides low-cost revolving loans for energy efficiency projects in buildings as well as for conversion of vehicles to LNG/CNG or propane. Through the program, local governments and public colleges and universities can borrow up to $350,000 for fleet conversions. For more information visit: http://www.adeca.alabama.gov/Divisions/energy/Pages/EnergyFinancing.aspx

Contact the Alabama Clean Fuels Coalition for more information.

Georgia Incentives

  • Alternative Fuel Vehicle (AFV) Tax Credit: The state of Georgia offers an income tax credit for 10 of the cost to purchase or lease a new dedicated Alternative Fuel Low Emission Vehicle (LEV) or to convert a vehicle to operate solely on an alternative fuel that meets the standards for a low emission vehicle, up to $2,500 per vehicle. It is important to note that this incentive does not apply to hybrid electric, flex fuel, or biPfuel vehicles. Any portion of the credit not used in the year the LEV is purchased or converted may be carried over for up to five years. For more information, visit: http://www.afdc.energy.gov/laws/law/GA/5424
  • Alternative Fuel Vehicle (AFV) High Occupancy Vehicle (HOV) Lane Exemption: The state of Georgia offers a special license plate for alternative fuel vehicles, which allows access to the designated HOV lanes. Any vehicle that has been certified by the EPA in accordance with the Federal Clean Air Act may apply for the Georgia AFV License Plate. Alternative fuel vehicles displaying the proper AFV license plate may use HOV lanes, regardless of the number of passengers. In addition, vehicles with the AFV tag may also use the state’s High Occupancy Toll (HOT) lanes toll-free. For more information, visit http://www.afdc.energy.gov/laws/law/GA/5183
  • Commercial Alternative Fuel Vehicle (AFV) Tax Credit: Beginning July 1, 2015, the state of Georgia will offer an income tax credit is available to taxpayers who purchase new commercial medium-duty or heavy-duty AFVs that operate using at least 90 alternative fuel. Eligible alternative fuels include electricity, propane, natural gas, or hydrogen fuel. Medium-duty hybrid electric vehicles also qualify. Eligible medium-duty AFVs with a gross vehicle weight rating (GVWR) between 8,500 and 26,001 pounds (lbs.) may qualify for a credit of up to $12,000. Heavy-duty AFVs with a GVWR over 26,001 lbs. may qualify for a credit of up to $20,000. The maximum credit per taxpayer is $250,000 and no unused portion of the credit may be carried forward. Qualified AFVs must be purchased before June 30, 2017, remain registered in Georgia for at least five years, be certified by the Georgia Board of Natural Resources, and accumulate at least 75 of their annual mileage in Georgia. The Georgia Department of Revenue will pre-approve credit applications on a first come, first served basis. Up to $2.5 million in total credits will be available each fiscal year. For more information, visit: http://www.afdc.energy.gov/laws/law/GA/11420

Contact Clean Cities-Georgia for more information.

South Carolina Incentives

  • Energy Efficiency Revolving Loan (EERL): This loan fund is open to business or industry, utilities, and government agencies and fleet conversions are eligible under the program and the loan can be used for fuel kits in conversion or the alternative fuel upfit cost in a new vehicle. It has a low interest rate that varies on a transaction-by-transaction basis. Interested parties must complete an application, and have an approved energy conservation plan and a technical analysis. This loan, which lasts for one-and-a-half times the expected payback of the loan, is evaluated based on financial stability of the borrower and technical merit of the proposed energy plan and has a maximum amount of $1 million. For more information, visit: http://www.energy.sc.gov/incentives/eerl 
  • ConserFund: The South Carolina Energy Office administers a low-interest loan program for energyGefficiency improvements and is available to state and local governments, school districts, and non-profits. Fleet conversions to alternative fuels are eligible under the program and the loan can be used for fuel kits in conversion or the alternative fuel upfit cost in a new vehicle. The loan has a two percent interest rate for up to $500,000 per fiscal year. For more information, visit: http://www.energy.sc.gov/incentives/conserfund
  • SouthCarolinaSaves: Abundant Power offers low cost financing to South Carolina governmental, institutional, and commercial and industrial properties for qualified conservation measures, including LNG/CNG or propane fleet conversions. A below market rate is enabled through the use of Qualified Energy Conservation Bonds allocated by the South Carolina Energy Office and issued through the South Carolina Jobs-Economic Development Authority (JEDA). The Program's funding may be used to purchase and install energy efficiency and alternative fueling projects (fleets and infrastructure) that achieve a 10Gyear payback or better. For more information, contact Greg Montgomery with Abundant Power: This email address is being protected from spambots. You need JavaScript enabled to view it.

Contact the Palmetto State Clean Fuels Coalition for more information.

Tennessee Incentives

  • High Occupancy Vehicle (HOV) Lane Exemption: Any Inherently Low Emission Vehicles or Low Emission and EnergyGEfficient Vehicles as defined by the U.S. Environmental Protection Agency weighing 26,000 lbs. or less, are permitted the use of HOV lanes with no restriction on passenger number. There are designated AFV stickers that indicate single occupant AFVs permitted to drive in the HOV lane. For more information, visit: http://www.afdc.energy.gov/laws/law/TN/6433 
  • Green Parking Permit (Nashville): Clean technology vehicles may be eligible for a Green Parking permit that allows for free parking only at metered spaces located within the Downtown Central Business Improvement District. The permit is only available for private passenger vehicles. For more information, visit: http://www.nashvilleclerk.com/motor-vehicles/green-parking-permit/

For more information, contact the Tennessee Clean Cities Coalition in your area: East Tennessee Clean Fuels Coalition | Middle Tennessee Clean Fuels | West Tennessee Clean Fuels Coalition

Propane Case Studies

Click on the Case Studies icon above for case studies highlighting the successful deployment of propane from the four-state region.

Alternative Fuels Readiness Workbook

The Alternative Fuels Readiness Workbook provides resources and tools to help educate fleets about natural gas and propane vehicles, including an introduction to the fuel, applications appropriate for the fuel, discussions regarding vehicle acquisition and fueling infrastructure, as well as information regarding incentives and programs that may be available to a fleet. Download the propane section of the workbook.

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