Hawaii Diesel Replacement Rebate 2023 Program (Year 2)

This program offers up to 45% percent rebate towards a zero emission medium or heavy –duty vehicle that replaces an existing diesel-powered vehicle. The replacement vehicle can be either hydrogen powered or a battery-electric vehicle. The rebate can also cover up to 45% of the cost of a battery-electric vehicle charger.

$1,278,600 is available for the second year of the program. 

The DRR will fund up to 45% of selected projects.  

Program Opens: Tuesday, February 7, 2023, 9 am (HST) 

Program Deadline: Rolling basis, until funds are reserved or replenished.

Deadline for Receipt of Vehicle: September 30, 2024

Applicants must utilize the vehicles in the State of Hawaii. Public and private organizations within the State of Hawaii with eligible projects are encouraged to apply.

State employees, State contractors, or subrecipients of the State are precluded from making decisions on rebates to firms/individuals where there is an obvious conflict of interest. As such, for the purposes of this program, employees and contractors/subrecipients of Hawaii Department of Health – Clean Air Branch and the Hawaii State Energy Office are not deemed eligible. 

The following vehicles are eligible for a replacement rebate through this program:

• School Buses
• Transit, Shuttle, and Tour Buses
• Medium and Heavy-duty Vehicles (Class 5, 6, 7, and 8)
• Non-road Vehicles

• The existing vehicle must be diesel-powered. 
• The existing vehicle must be located in the state of Hawaii. 
• The existing vehicle must be fully operational. Operational vehicles must be able to start, move, and have all necessary parts to be operational. 
• The applicant must currently own and operate the existing vehicle and have owned and operated the vehicle during the two years prior to application.
• To be eligible for funding, nonroad vehicles must have operated at least 500 hours each year during the two years prior to application. All highway vehicles must have accumulated at least 7,000 miles each year during the two years prior to application. 
• The existing vehicle must have at least three years of remaining life at the time of replacement. This is a DERA funding requirement.
  • Remaining life is the fleet owner’s estimate of the number of years until the unit would have been retired from service if the unit were not being upgraded or scrapped because of the grant funding. The remaining life estimate is the number of years of operation remaining even if the unit were to be rebuilt or sold to another fleet. The remaining life estimate depends on the current age and condition of the vehicle at the time of upgrade, as well as things like usage, maintenance, and climate. 

• The replacement vehicle must be fully electric with a new zero emission engine
• The replacement vehicle may be either battery-powered or hydrogen powered
• The replacement vehicle should resemble the replaced unit in form and function
• The replacement vehicle should be the most recent model year available
• The replacement vehicle must not be a retrofit
• The replacement vehicle should be of similar type and similar gross vehicle weight  rating or horsepower as the vehicle being replaced
• The replacement vehicle MUST operate in the state of Hawaii for a minimum of 5 years immediately following deployment

• Projects may include the purchase of one new charging unit per vehicle, including the unit and charging cable, mount and/or pedestal. Fueling stations for Hydrogen replacement projects are not eligible costs for the calculation of the rebate.
• The cost of a charger can be included in the overall project total, and is subject to the 45% rebate limit.
• If the applicant is also applying for the Hawaii Energy charger rebate, the applicant must disclose the projected rebate amount. The Hawaii Energy rebate will be netted from the project cost and the Diesel Replacement Rebate will be applied to the remaining cost. HSEO reserves the right to check with Hawaii Energy to confirm information prior to paying out the Diesel Replacement Rebate.
• Ineligible costs for EV chargers include power distribution to the pedestal, electrical panels and their installation, upgrades to existing electrical panels or electrical service, transformers and their installation, wiring/conduit and its installation, electricity, operation and maintenance, stationary energy storage systems that power the equipment (e.g. batteries) and their installation, and onsite power generation systems that power the equipment (e.g., solar and wind power generation equipment) and their installation.

• The vehicle replaced must be scrapped or rendered permanently disabled within ninety (90) days of the replacement being received.
• Evidence of appropriate disposal including digital photos of the VIN tag, side profile of the vehicle, engine tag (showing serial number, engine family number, and engine model year), before and after pictures of the destroyed engine block, and cut frame rails or other cut structural components as applicable. 
• The scrapping method must include drilling a three inch hole in the engine block and disabling the chassis; 
• Vehicle components that are not part of the engine or chassis may be salvaged from the unit replaced; and 
• If scrapped or salvaged vehicles/parts are sold, the income may be used to meet the cost-sharing or matching requirement of the award. Therefore, the rebate amount will remain the same. 
• Successful project participants must complete a Scrappage Statement and have it signed by the relevant parties in order to receive the final rebate. 

Applications will be reviewed in the order they are received. Projects will be selected in accordance with DERA and DRR program requirements and funding availability.    

Applicants will be notified individually as decisions are made, and completed projects will be posted publicly on www.energy.hawaii.gov/DRR.

1. Interested organizations can apply using the online form at www.energy.hawaii.gov/DRR. A sample application can be found online as well.  
   • Applicants will be required to submit a dealer quote for the vehicle (and charger, if applicable). The quote(s) should be dated and include a complete breakdown of all material costs as applicable: vehicle, hardware, warranty costs, freight or shipping costs, installation costs, setup fees, and the sales tax with the percentage rate indicated.
2. Applications will be reviewed in the order received and evaluated according to DRR and DERA requirements.
3. Applicants will be notified via email.
   
   • Successful participants will have an estimate of their funding reserved. Funds will be paid when final documentation is received (see requirements below).
   • Participants will be required to sign an Eligibility Statement and a Participant Agreement.
4. Participants will be required to show proof of purchase no later than 4 months after their application was submitted. Extensions are possible but not guaranteed. In the event that a participant cannot show proof of purchase within 4 months following their application, their funds may be released.
5. Prior to finishing their project, participants will be sent a Project Detail document, where they will input project details for reporting purposes.
6. When a participant has completed their project, they will submit the final documentation, including a Request for Reimbursement form and Scrappage Certification that attest to the project being complete.
7. After the project funds have been paid out, the participant will sign an Award Receipt.
8. Eligible applications in excess of funding availability will be placed in a queue and their applications will be revisited as funding becomes available. 

View sample DRR application.