The range of benefits that electric buses can bring to a community has become a complicating factor in their adoption, according to Jigar Shah, director of the U.S. Department of Energy’s Loan Programs Office (LPO).

But the DOE is positioned to help.

Stacking up the values of e-buses makes it difficult to determine who should pay for the vehicles, Shah said during the Electric Power Research Institute’s Frontiers of E-Mobility forum on Monday.

In meeting a school’s transportation needs, an e-bus also ensures students are breathing cleaner air. That’s a public health benefit that carries over to healthcare costs by reducing asthma rates in children, for example, Shah said.

The same bus can be used as a generator in emergency situations.

“Many schools are emergency shelters, so you can power the school building off the school bus,” Shah said, adding that generator costs likely would be part of a municipality’s emergency services budget.

Multiple buses also can become a virtual power plant to replace a natural gas peaker plant.

“We pay handsomely to make sure that [those plants] are capable of operation, even if we don’t use them,” he said. “You can divert those payments to school buses.”

The e-buses can transport kids in the morning and afternoon, and otherwise be plugged in for peaker services, which delivers value to the local electric utility.

All the potential values of an e-bus make it unclear who should pay for the buses in the early stages of adoption, and therefore slows down the adoption process, Shah said.

“LPO can help to start solving the chicken-and-egg situation where folks on the ground might say that the school board has to go first or the utility has to go first or the governor’s office,” Shah said.

DOE has loan guarantee authority to support carbon-reducing energy projects, like a fleet of e-buses, where the department recognizes a clear value stream. Someone still needs to initiate an application to LPO, he said, but from there, the office can support a proposal that all beneficiaries of the value stream can “rally behind.”

Early discussions about who should own a battery that supports the power grid point to utilities, according to Shah.

“Utilities do have cheap money, but that cheap money is regulated,” he said.

While regulators may not have confidence in a battery’s ability to deliver system benefits or hold up through long-term use, the DOE has done that research already.

“We’ve tested it,” he said. “We have the ability to more confidently … give you a 30-year loan because we actually think that [the battery] will last 30 years.”

Even if there is a problem, he added, DOE believes the infrastructure is in place now to support upkeep on batteries.

Business Value

The predictable nature of electric vehicle maintenance could break open a new way to support EV value streams, according to Shah.

“I think you will see a huge movement around people [leasing] EVs on a cost-per-mile basis,” Shah said.

The EV market is already delivering vehicles at a price that is cheaper than internal combustion engines on a cost-per-mile basis over 200,000 miles. And as EV sticker prices continue to drop, their value to the system will go up, Shah said.

“Having a central owner that rents them out on a vehicle cost-per-mile basis, you now have a central group that can unlock all the other value streams of the vehicles,” he said. Individual owners likely are not going to go out of their way to tap into those streams.

The low maintenance costs of EVs, he said, will unlock business model innovations.