Many business leaders fear electric vehicle (EV) charging stations will add significant costs to their energy expenditures? Are they justified?
Eighteen percent of new car sales in California were electric last quarter (Q2/2022). With more employees driving EVs, charging stations can prove a key differentiator in a competitive real estate market.
But what’s all this charging going to cost?
Rising energy costs paired with EV charging sounds scary. Many fear new EV charging stations could lead to runaway utility bills, gnawing into company profits.
Others express concern with the state of their facility’s existing electrical infrastructure. Could new EV chargers trigger expensive utility upgrades?
Sound familiar? If you’re nodding, you’re not alone.
Let’s provide clarity. I’ll debunk some common myths and arm you with facts as you consider your organization’s next EV charging project.
Let My People Charge – I Think?
Business owners often ask me two questions: how much electricity an electric vehicle (EV) needs, and how will it impact my businesses’ electrical bills?
Let’s run some numbers with a quick example.
Consider Sonia, one of your valued employees. She commutes 35 miles round trip to your workplace, representing the average American commute according to the US Department of Transportation.
Vehicle efficiency affects the amount of fuel required to travel 35 miles. For example, if Sonia’s gas-powered vehicle gets 35 miles per gallon, she’ll need 1 gallon of fuel. If her car is half as efficient at 17.5 miles per gallon, she’ll need 2 gallons. You get the idea.
Electric vehicles use a different measure of energy. Instead of gallons of gasoline, we use kilowatt-hours (kWh).
A kilowhat?! Don’t worry, it’s easy. Consider a single kWh propels an EV between 3-4 miles.
So if Sonia traveled 35 miles in an EV, she’d need about 11 kWh (rounding up). Are you with me? Good.
So Sonia needs 11 kWh to cover her daily commute. So how much does that cost?
Home or Away
If you live in California like me, electric rates vary throughout the day. Electricity costs more during “on-peak periods”, generally from 4 – 9 pm. On average, our family pays about $0.35 per kWh. Let’s assume the same for Sonia.
When Sonia charges an EV at home, driving 35 miles costs $3.85 in fuel. (11 kWh x $0.35 per kWh).
But charging at work is way less expensive. Why is that?
If Costco Sold Electricity
Here in California, utilities offer businesses lower commercial rates than residential customers. That’s because commercial customers use more energy, resulting in a lower marginal cost of energy. Think of it as a bulk discount, like if Costco sold electricity. The more you consume, the lower the per-unit cost.
For example, my employer pays our utility, San Diego Gas and Electric, an average electric rate of $0.20 per kWh. That’s 43% less than my average residential rate of $0.35 per kWh!
Many of our customers offer their employees complimentary no-cost charging as an employee perk. So what does that cost an organization?
Back to Work
Workplace EV charging costs Sonia’s organization $2.20 in electricity to cover her 35-mile daily commute (11 kWh x $0.20 per kWh).
As one customer recently pointed out, $2.20 is less than the cost of a cup of coffee. For large businesses, a paltry $2 is hardly noticeable. But it makes a big difference in Sonia’s life. She doesn’t have a reliable charging option at home.
Her company’s $2 daily investment saves her over $6 a day in driving costs while reducing her carbon footprint – a soft benefit that also earns her loyalty.
Consider a business that charges 20 employees’ EVs each day. That would cost about $44 in electricity while saving employees over $120 in fuel savings. Every single day. That’s a nice recruiting piece, eh?
Fleeting Thoughts
Fleet operators often think in “Cost per 100 miles”. For our fleet friends, it takes about 40 kWh to drive an electric transit van 100 miles, or $8 in electricity costs ($0.20 x 40 kWh).
Driving a comparable gas-powered delivery van 100 miles could run $30 (5 gallons x $6 per gallon). Driving a gas-powered van costs 275% more than an EV in fuel costs alone. That’s over $3,000 in fuel savings every 10,000 miles.
Keep Charging
Commercial charging stations require “networking fees” or “software licensing” to maintain communications with the cloud. Costs vary based on the developer.
For example, the company I work for calls them “Software and Support Services” covering software, phone driver support, driver app operation, and a back-end monitoring portal. We charge between $240 – 300 per port annually for operation depending on the location.
But Sonia’s employer also has a secret weapon to reduce overall operating costs.
Intelligent software optimizes EV charging sessions during times when energy is least expensive. It results in big utility bill savings. Up to 40% in some cases. It’s called adaptive load management. Not all EV charging stations have it. Those that don’t lose out on huge savings potential.
Putting It All Together
Let’s recap. A $2 investment saves Sonia up to $6 in gas each day she drives her 35-mile round-trip commute. She now has a reliable place to charge and loves driving an electric vehicle for several reasons. Fleet managers can save thousands of dollars in fuel costs each year.
Load management optimizes EV charging sessions, keeping utility bills for her company even lower. Plus her employer can claim some serious GHG reductions in the next annual ESG report.
With gas surpassing $6 per gallon, affordable EV charging can lure valuable employees like Sonia back to the office. Fleet operators can cash in on serious fuel savings while showcasing their sustainability commitments.
So, how much does it cost to install EV charging stations? Find out in my 3-minute post True Costs: Installing Electric Vehicle Charging Stations for My Business.
About the Author
My name is Alex. I’m working alongside a talented team that makes it easy for organizations to add electric vehicle charging and other clean energy technologies to their facility or campus.
I live in San Diego and enjoy hiking, bicycling, traveling, spending time with my wife and son, and pondering the clean energy transition. You can reach me directly at alex.kaufman@powerflex.com.