Earlier this week, officials from the Baker administration announced plans to extend Massachusetts Offers Rebates for Electric Vehicles (MOR-EV) until September 2019 when, absent new funding, the program will come to an end. Eliminating this popular incentive now moves Massachusetts in the wrong direction and will make meeting our ZEV goals (300,000 EVs by 2025) that much more challenging.
Deja vu all over again
MOR-EV is a very popular program first launched in 2014 with the goal of accelerating adoption of zero emission vehicles (ZEVs) through education, outreach, and consumer incentives to purchase or lease eligible cars. It has been a key driver of EV (electric vehicle) adoption and in the past five years has totaled nearly $30 million invested in over 14,000 rebates.
In response to popularity of the program, the Baker administration first committed $12 million dollars to replenish MOR-EV in 2016. An additional $3 million was subsequently committed. In December 2018, it was announced that the program would be extended again through June 2019. Program modifications were also enacted in January 2019, including a reduction in the rebate amount from $2,500 to $1,500 to be applied to only battery-electric vehicles (BEVs) with a sales price under $50,000.
We value the contribution to EV adoption that MOR-EV has made, aiding the purchase or lease of eligible vehicles by defraying the upfront costs that can be a barrier to adoption. So then, as now, we appreciate the constraint that DOER is facing and applaud the state's efforts to extend this critically important program. At the same time, we acknowledge that the Commonwealth needs to do more to spur electric vehicle adoption, including working to identify a dedicated source of funding to sustain a program that is helping to grow the state's EV market.
Money, money, money
MOR-EV is funded with proceeds from Regional Greenhouse Gas Initiative (RGGI) auction. RGGI helps to reduce greenhouse gas (GHG) emissions from power plants in Massachusetts, Rhode Island, Connecticut, Delaware, Maine, Maryland, New Hampshire, New York, and Vermont by capping pollution allowed from facilities. Generators then bid in auctions to purchase allowances, or the right to emit a certain amount of GHG emissions. The proceeds from these auctions are invested in a variety of ways in each RGGI state. In Massachusetts, law requires that 80% be reinvested in energy efficiency and 20% invested in other mitigation and carbon abatement measures. For the last five years, some of that 20% has gone to MOR-EV, but those resources are limited. Available funding has been unable to keep pace with growing demand for the rebate. In a nutshell, the state is running out of money for MOR-EV.
As part of his FY20 budget, Governor Baker proposed loosening restrictions on RGGI allocations and authorizing the Department of Energy Resources (DOER) to direct investments in adaptation, resiliency, and mitigation. The same proposal was considered as an amendment to both the House and Senate budgets. Each time, it was rejected. We previously wrote about why we oppose this approach -- namely because cannibalizing energy efficiency and other mitigation dollars to pay for adaptation makes no sense. Instead, we should be working to dedicate sufficient resources for both!
a better solution exists
Upon hearing of the very possible end to MOR-EV, members of the Zero Emission Vehicles (ZEV) Commission formally expressed their overwhelming support for the incentive program and urged the Baker administration to establish a sustainable source of funding the program. We agree...with a caveat: Green Energy Consumers Alliance does NOT support a permanent reallocation of RGGI dollars for the reasons described above.
Rebates alone won't fully transform the transportation sector, but that makes them no less important! We still need them. Places around the world that have adopted EVs at higher rates than Massachusetts, such as Norway, China, and California, have larger incentives. Rhode Island has not had a state rebate for a couple of years and it shows - sales of EVs in the Ocean State are lagging behind states with rebates.
We also need to consider that MOR-EV's budgetary shortfall is symptomatic of a larger issue -- we do not adequately fund some of our most important clean energy initiatives, at least not on a level needed to transform markets or to move the needle on climate change.*
Which is why any long term program strategy must entail establishing a dedicated source of funding capable of supporting MOR-EV and other state-administered programs that are so essential to meeting our clean energy and climate obligations. Accomplishing this requires collaboration between legislators, members of the administration, and advocates. At Green Energy Consumers Alliance, we will continue to advocate for a solution that does not pit efficiency against electrification or adaptation against mitigation.
Stay tuned for program updates and future announcements and if you're thinking of getting an EV, take advantage of MOR-EV before September.
*In my next blog post, I'll revisit two other approaches to funding climate programs in Massachusetts that have been a focal point in recent weeks.