The electricity generation/supply and transportation sectors are the two largest contributors to greenhouse gas (GHG) emissions in the U.S., and vehicle-to-grid (V2G) technology is a rapidly emerging solution to reduce these emissions with the adoption of battery-electric (BE) vehicles. Deployments of BE transit and school buses are expected to have larger battery capacities than passenger vehicles, making them more feasible candidates for V2G service. Five electricity generation regions are considered for cash flow analysis of BE and diesel transit and school buses over their entire respective lifetimes with the allowance of V2G services’ net revenue. Besides, the environmental benefits of using the V2G system are studied in place of combustion power generation plants for the regulation services of each study region. Air emission externalities are another crucial issue for bus operations because buses are operated near highly populated areas, so these externalities are also studied in this research with the benefits of a V2G emission reduction potential taken into account. The analysis concluded that BE transit and school buses with V2G application have potential to reduce electricity generation related greenhouse-gas emissions by 1067 and 1420 tons of CO₂ equivalence (average), and eliminate $13,000 and $18,300 air pollution externalities (average), respectively.