In May 2024, the Michigan legislature passed its bipartisan annual budget, including a historic $125 million to establish the Clean Bus Energy Grant (CBEG) Program. The program’s resounding success has demonstrated that well-designed state-level programs can meaningfully accelerate ESB adoption, and the lessons drawn from its structure and implementation offer a valuable roadmap for other states looking to follow suit. Building on the governor’s Executive Budget recommendation, this funding complements the rebate and grant awards Michigan school districts received through the Environmental Protection Agency’s Clean School Bus Program—a national program that provides $5 billion throughout fiscal years 2022–26 to purchase clean school buses. By eliminating the financial barrier to adopting technology that keeps students safe, Michigan’s CBEG program also helps the state fulfill the MI Healthy Climate Plan and supports Goal 3 in its Top 10 Strategic Education Plan—to improve the health, safety, and wellness of all learners.
Source: Environmental Law & Policy Center
Nearly two years later, the Michigan Department of Education has awarded all $125 million, deployed approximately 322 ESBs across 100 Michigan school districts, and removed 376 diesel buses from the road. The program’s efficient and effective distribution of funding is largely due to the strong support of advocacy, industry, state, and utility partners; thoughtful program design and management that incorporated lessons from past efforts within and outside Michigan; and robust support and technical assistance for program applicants.
Program Formation and Stakeholder Involvement
The program was both built and implemented with regular input from advocates and industry members. Consistent advocacy and support from the It’s Electric! ESB coalition, which led regular meetings with school transportation staff, as well as ESB teach-ins and webinars, was critical in building program awareness and enthusiasm. School staff are already overworked, so encouraging program participation often requires somebody who can meet staff where they are, as recognized by the coalition of advocates in Michigan.
Kindra Weid presenting at the 2024 MI ESB Teach-In
“We know change comes with challenges, but these buses are worth the effort, and school districts across Michigan are experiencing lower maintenance costs, quieter rides, and improved air quality as a result of their efforts pioneering new technology,” said Kindra Weid, It’s Electric! coalition coordinator.
Utilities such as DTE Energy and Consumers Energy have also worked closely with school districts during early planning. DTE’s Charging Forward Program and eFleet Advisory Services supported the charger buildout and infrastructure upgrades needed for Pontiac City School District’s 40 ESBs, all of which are operational today. Consumers Energy offers the PowerMIFleet program, providing guidance on fleet electrification and financial incentives ranging from $5,000 to $70,000 for vehicle charging equipment. Jackson Public Schools is the latest example with 21 new ESBs. Highland Electric Fleets partnered with the district to provide Electrification as a Service (EaaS), supporting fleet procurement and infrastructure upgrades. Consumers Energy also provided free electrical work to install charging infrastructure, in addition to $300,000 in funding to purchase the buses.
Program Challenges
One of the most significant challenges facing the CBEG Program was the disruption caused by delays in federal funding, which undermined the cost-matching model the program was designed around and left school districts in a frustrating holding pattern. Common barriers to charging infrastructure deployment, such as difficulty with energization, permitting, interconnection, excavation, and equipment procurement, also presented challenges. These processes and associated costs often extend beyond what districts anticipate at the outset, and without adequate support to navigate them, momentum can quickly stall.
Pontiac School Distrct’s ESBs use L-Charge’s off-grid EV charging to operate without waiting for utility upgrades.
Source: L-Charge
Another issue has been manufacturer reliability: both Lion Electric and BorgWarner have failed to honor service commitments and warranties, leaving some districts with buses and charging equipment they cannot fully depend on—a serious deterrent to broader ESB adoption. The CBEG Program was designed with enough flexibility to allow the state to dedicate a silent funding round specifically for school districts affected by Lion’s bankruptcy, creating a pathway to procure ESBs from alternative OEMs and allowing projects to continue.
Finally, the scope of eligible funding left critical gaps in some areas. Infrastructure upgrades such as physical building modifications, electrical work from the utility pole to the meter, and the procurement of charge management software were not consistently covered, yet are essential to getting a fleet fully operational. Another notable gap was the absence of funding for workforce development and training. For school districts that own and operate their own buses, transitioning to an electric fleet requires equipping drivers, mechanics, and facilities staff with new knowledge. Expanding access to these resources and funding eligibility to encompass these elements—beyond the basic training offered by OEMs—would go a long way.
Lessons Learned from Prior Experiences
Prior to the CBEG program, Michigan school districts were already leveraging public funding to transition to ESBs. In 2019 and 2020, EGLE awarded about $13 million in grants through its now-closed Fuel Transformation Program to purchase 317 electric, clean diesel, and propane school buses and to support infrastructure for more than 25 districts across the state. The EPA CSBP has awarded ~$95.76 million to Michigan school districts across all rounds, totaling ~304 buses. Together, federal and state grants and rebates so far account for nearly 900 buses.
The MI CBEG program sets itself apart from previous state and federal programs by deploying best practices from around the country. Unlike previous programs, which relied primarily on retroactive payments for procured vehicles, the CBEG program provides upfront payment, ensuring financial capacity is never a barrier to participation. It requires service level agreements as a condition of application, holding vendors to long-term commitments and protecting districts from being left with vehicles and equipment they cannot maintain. Together, these features reflect Michigan’s leadership in launching a program built to deliver outcomes, not just to distribute dollars.
Because the program was designed to allow stacking of state and federal funds, school districts with existing EPA awards, like Lansing School District, which received $5.9 million to purchase 15 ESBs, applied for the CBEG Program and were awarded an additional $4.31 million for 10 ESBs.
Technical Assistance Provided
Simply issuing a request for proposals (RFP) is not enough to solicit equitable statewide participation, as the school districts most in need of support are least likely to have the capacity to stay on top of funding opportunities, wade through complex requirements, and coordinate a winning application.
To address this, the CBEG program launched with a simplified RFP, a detailed applicant checklist, and a guide to completing the RFP. Advocates and utilities supported interested school districts in the application process and beyond. Industry members also played a key role in bringing effective business models and services for successful procurement and deployment. Dean Transportation, which provides school bus transportation for several districts across Michigan, assisted the Grand Rapids School District in securing over $6.68 million in federal and state funding for ESBs and charging infrastructure.
Despite the challenges around school bus electrification in rural communities, including smaller budgets for school districts, longer routes, and energization complexities, Hoekstra Transportation Inc. helped Chippewa Hills School District effectively deploy ESBs and charging infrastructure.
Dearborn Public Schools ESB
Impact
Michigan schools are already reaping the benefits of their ESB investments. As of 2023, Three Rivers Community Schools—the first district in Michigan to procure ESBs back in 2016—had saved approximately $44,000 in fuel costs and $45,000 in maintenance and repair costs since deployment, with those savings reinvested directly into instructional materials for students. The fleet has also reduced approximately 81.5 metric tons of emissions since initial deployment, protecting children’s health. Pontiac City School District is Michigan’s first all-electric fleet and first to use L-Charge’s off-grid chargers to overcome grid delays, while its vehicle-to-grid (V2G) capable buses open the door to revenue generation and serve as a community energy resilience tool, functioning as mobile power sources during outages. As Superintendent Dr. Kimberly Leverette put it: “Every quiet, fume-free ride is a win for student health, mental well-being, and our community’s future.”
School bus electrification protects our children’s health and reduces the amount schools spend on fuel and maintenance for their fleets; as the remaining federal funds to support the transition are spent down, states can and must step up. Thankfully, Michigan has provided a blueprint for other states to find success in launching their own programs. Its CBEG program demonstrates the efficacy of state-level programs in accelerating ESB adoption and offers several important lessons about program design and implementation: by involving public- and private-sector stakeholders from day one, applying lessons learned from previous iterations of similar programs, and providing robust technical assistance, the program quickly converted funds into buses—delivering on state-wide educational and public health priorities.