Alabama Laws and Incentives
Listed below are the summaries of all current Alabama laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
Alabama's National Electric Vehicle Infrastructure (NEVI) Planning
The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Alabama Department of Transportation (ALDOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office), describing how the state intends to distribute NEVI funds. The submitted plans must be established according to NEVI guidance.
For more information about Alabama’s NEVI planning process, see the Alabama Department of Economic and Community Affairs Electric Vehicle Charging Infrastructure Program website. To review Alabama’s NEVI plan, see the Joint Office State Plans for EV Charging website.
Electric Vehicle (EV) Charging Station and Medium- and Heavy-Duty Diesel Vehicle Replacement Rebates
The Alabama Department of Economic and Community Affairs (ADECA) offers grants for light-duty EV charging stations and the replacement of qualified medium- and heavy-duty diesel vehicles with new diesel or alternative fuel vehicles. Grants are available for EV charging stations; medium- and heavy-duty trucks; school, shuttle, and transit buses; freight switchers; airport ground support equipment; and forklifts and port cargo handling equipment. Vehicles must meet model year requirements. Funding amounts are based on vehicle type, fuel type, and applicant type. Grants are funded by Alabama’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including program guidance and the application, see the ADECA Volkswagen Settlement website.
Biofuel Research and Development Funding
The Alabama Department of Economic and Community Affairs (ADECA) administers the Alabama Research and Development Enhancement Fund (ARDEF) Program to encourage new and continuing research and development efforts within the state for the purpose of increasing employment opportunities, and products and services available to the citizens of Alabama. The production of biofuel is eligible for ARDEF funding. For additional information, see the ADECA Energy Division and ARDEF Program websites.
(Reference Code of Alabama 2-2-90)
Point of Contact
Energy Division Chief
Alabama Department of Economic and Community Affairs
Phone: (334) 353-3005
Biofuel Production Jobs Tax Credit
Companies that invest in the development of a biofuel production facility may be eligible for a tax credit of 3% of the previous year’s annual employee wages. Companies may claim this credit against the utility gross receipts and utility service use taxes for up to 10 years; the credit may be refundable during the incentive period or claimed as a credit against utility taxes paid with a carryforward for earned but unused amounts. Companies may also be eligible for a tax credit of 1.5% of qualified capital investment annually for up to 10 years. Companies may claim this credit against the income tax, estimated income taxes, financial institution excise tax, or the insurance premium tax. The credit may also be claimed as a credit against taxes paid with a carryforward for earned but unused amounts.
For the purposes of the credit, biofuel is defined as a motor vehicle fuel that is produced from grain, starch, oilseeds, vegetable, algae, animal materials, or other biomass. To be eligible for the tax credits, companies must execute a project agreement with the Governor.
Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption
Any motor vehicle equipped with an auxiliary power unit (APU) or other idle reduction technology may exceed the gross, axle, tandem, or bridge formula weight limits by up to 400 pounds (lbs.). To be eligible for the weight exemption, the vehicle operator must be able to provide written proof or certification of the weight of the APU and demonstrate or certify that the idle reduction technology is fully functional at all times. Any NGV may exceed the limits by up to 2,000 lbs.
(Reference Code of Alabama 32-9-20)
Electric Vehicle (EV) Charging Station Grants
The Alabama Department of Economics and Community Affairs (ADECA) administers the EV Charging Infrastructure Program. Government and non-government entities are eligible to receive funding for the installation of publicly accessible direct current fast chargers (DCFC) and Level 2 EV charging stations along non-interstate corridors. Additional terms and conditions apply. For more information, see the ADECA EV Charging Infrastructure Program website.
Utility / Private Incentives
Electric Vehicle (EV) Charging Station Rebate – Tennessee Valley Authority (TVA)
TVA will establish and fund a network of direct current fast charging (DCFC) stations every 50 miles along interstates and major highways through the Fast Charge Network Program (Program). The Program offers funding for public DCFC stations along EV corridor gaps, up to $150,000 per DCFC station. Eligible applicants include TVA Local Power Companies, and eligible projects must include a minimum of two DCFC ports per location. Program participants must identify suitable host sites and agree to own, operate, and maintain Program-funded DCFC stations for a minimum of five years. For more information, including guidelines and additional eligibility requirements, see the TVA Fast Charge Network website.
Residential Electric Vehicle (EV) Time-Of-Use (TOU) Rates - Alabama Power
Alabama Power offers a TOU rate to residential customers that own or lease an EV. For more information, see the Alabama Power EV rate website.
Commercial Electric Vehicle (EV) Charging Station Rebate - Alabama Power
Alabama Power’s Make Ready Program offers rebates to commercial customers for the installation of Level 2 and direct current fast charging (DCFC) stations. Rebates are available in the following amounts:
|EV Charging Station Type
|Minimum Power Output Rating
|Rebate per Port
|Minimum Port Installations per Site
|Maximum Port Installations per Site
|Maximum Rebate Applications per Year
|6.6 kilowatts (kW)
Additional terms and conditions apply. For more information, see the Alabama Power Make Ready Program website.
Business Electric Vehicle (EV) Time-Of-Use (TOU) Rates - Alabama Power
Alabama Power offers a TOU rate to business customers for public EV charging stations. Eligible customers electricity usage must be separately metered from all other electrical load and be for the exclusive purpose of charging EVs. For more information, see the Alabama Power EV rate website and Business EV rate terms.
Electric Vehicle (EV) Infrastructure Support
Alabama utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.
Laws and Regulations
Electric Vehicle (EV) Charging Station Grant Program
The Alabama Department of Transportation is authorized to administer the Electric Transportation Infrastructure Grant Program to distribute grants for EV charging station infrastructure expansion.
(Reference Code of Alabama 40-12-242)
Autonomous Vehicle (AV) Operation Requirements
An AV may be operated without a driver physically present in the vehicle if the AV is capable of operating in compliance with applicable federal and Alabama traffic and motor vehicle laws, certified in accordance with federal motor vehicle safety standards, can achieve a minimal risk condition if the vehicle is unable to perform an intended task or exists its operational design domain, and has proof of insurance. Additional conditions apply.
(Reference Code of Alabama 32-9B-1 through 32-9B-8)
Public Utility Definition
An entity that owns, operates, leases, or controls electric vehicle charging stations is not defined as a public utility.
Electric Vehicle (EV) Fee
EV owners must pay an annual fee in addition to standard registration fees. All-electric vehicle owners must pay an annual fee of $203 and plug-in hybrid electric vehicle owners must pay an annual fee of $103. EV fees increase by $3 every four years. A portion of fees contribute to the Electric Transportation Infrastructure Grant Program, which provides grants for EV charging stations.
(Reference Code of Alabama 40-12-242)
Alternative Fuel Taxes
The state road tax for vehicles that operate on propane (liquefied petroleum gas or LPG) is paid through the purchase of an annual flat fee sticker, and the amount is based on the vehicle’s gross vehicle weight rating. Each person owning and/or operating a vehicle that operates on propane must obtain a decal annually from the Alabama LPG Board. The decal must be affixed to the vehicle according to LPG Board specification as proof that the issuance fee and decal fee have been paid. Vehicle owners must apply for a decal within 10 days of converting a vehicle to operate on propane, or a 20% penalty will be applied to the decal fee. Out-of-state alternative fuel vehicle operators that purchase propane within the state must pay the current Alabama motor fuel tax or they may elect to purchase the annual flat fee decal. The propane dealer or supplier must remit these funds to the LPG Board before the 20th of the month following the date of sale.
Similarly, the Alabama Department of Revenue administers an excise tax on compressed natural gas (CNG) and liquefied natural gas (LNG) used as vehicle fuel. Taxes are applied in the following amounts: CNG: - $0.08 per gasoline gallon equivalent (GGE) until September 30, 2023; - $0.13 per GGE from October 1, 2023, until September 30, 2028; and - $0.18 per GGE from October 1, 2028 and beyond. LNG: - $0.08 per diesel gallon equivalent (DGE) until September 30, 2023; - $0.13 per DGE from October 1, 2023, until September 30, 2028; and - $0.18 per DGE from October 1, 2028 and beyond.
A GGE is equal to 5.66 pounds (lbs.) or 126.67 cubic feet of natural gas for CNG and a DGE is equal to 6.06 lbs. for LNG.
Fuel-Efficient Green Fleets Policy and Fleet Management Program Development
The Alabama Legislature established a Green Fleets Review Committee (Committee) and Green Fleets Policy (Policy) outlining a procurement procedure for state vehicles based on criteria that includes fuel economy and life cycle costing. State fleet managers must classify their vehicle inventory for compliance with the Policy and submit annual plans for procuring fuel-efficient vehicles. These plans must reflect a 4% annual increase in average fleet fuel economy for light-duty vehicles, a 3% annual increase in average fleet fuel economy for medium-duty vehicles, and a 2% annual increase in average fleet fuel economy for heavy-duty vehicles per fiscal year. Government entities must manage and operate their fleets in a manner that is energy efficient, minimizes emissions, and reduces petroleum dependency by using specified proven technology the Committee identifies.
(Reference Code of Alabama 41-17A-1 through 41-17A-6)
Electric Vehicle (EV) Charging Station Financing Program Authorization
The Alabama Department of Economic and Community Affairs (ADECA) administers the Commercial Property Assessed Clean Energy (C-PACE) program. Under C-PACE, a county, municipality, or improvement district may issue bonds, notes, or other types of financing methods to support energy efficiency or storm resilience improvements to commercial properties, including the installation of EV charging stations. For more information, see the ADECA Property Insurance and Energy Reduction Act website and the C-PACE Program Report.
(Reference Code of Alabama 11-81-240 through 11-81-250)