Ask anyone who’s done a major home renovation about how painful the early stages are and, if they’re still in those early stages, they’ll be more than happy to tell you. But, if you ask them a few months or even a year out from the project’s completion, nearly everything, except for how much they’re enjoying the renovation, will be a fading memory– including the cost. While not financial, that’s the true ROI.
When it comes to EV charging, many people focus on the potential upfront costs and often erroneously assume any EV charging project will require a major investment in infrastructure, but that’s simply not the case. For example, once your EV charging program is up and running, fleet electrification can lower your costs, and a public charging program can generate revenue through multiple streams.
Quick Links
- The Perceived Cost of EV Charging Solutions
- Funding for EV Charging Stations
- What is ROI for EV Charging Stations
- EV Charging Business Models and Fee Structures
- How Your CPMS Helps Ensure EV Charging ROI
- How Your EVSE Provider Can Help You Ensure ROI
The Perceived Cost of EV Charging Solutions
When considering EV charging stations, decision makers are often looking at the cost of the stations themselves, supporting tech, site needs which may involve construction, and, potentially, utility upgrades. Suddenly, what looks like a simple standalone machine becomes, in one’s mind, a massive investment.
And, given all the moving parts, it’s easy to see why, but if we dig a bit deeper, we can see that not only are their ways to save on EV charging programs, but when working with a turnkey EV charging solution provider who understands and manages every stage of the project, you can find ways to maximize and optimize existing sites and keep costs down. It’s just one of the reasons why you’ll want to seek the expertise of a company with experience and vision when it comes to the entirety of the project rather than just one aspect.
Funding for EV Charging Stations
While budgeting for the project is essential, there are also a lot of ways to help secure funding. From government grants and tax incentives, to EVSE provider rebates and incentives, there are a variety of ways to help fund your EV charging solution. And, given the need for power, electric companies and utility providers are offering rebates and incentives for installing DC fast chargers, level 2 charging stations, and purchasing electric vehicles for fleet or commercial use, so checking with your local utilities is always a good call.
Among the most well-known programs is the infrastructure bill which provides ample opportunity for both private and public entities to participate in building equitable and accessible EV infrastructure.
From that bill, $5 billion was set aside for The National Electric Vehicle Infrastructure (NEVI) Formula Program designed to help states build out EV charging sites. Working in stages, NEVI focuses on improving reliability first and then moving on to building more public charging stations across the country. Also, NEVI funding can be used on any portion of the project including site preparation such as utility upgrades, electrical connectivity, or other construction needs. The funds can, obviously, also be used for EV charging hardware or software. You’ll want to consult your state standards as they may be different from federal standards.
There’s also the Alternative Fuel Infrastructure Tax Credit which provides businesses that qualify with a 30% tax credit, up to $100,000, for the purchase and installation of EV charging infrastructure. Credits must be claimed on federal tax returns and equipment must be purchased between January 1, 2023, and December 31, 2032.
In short, there are lots of options to help you manage the upfront costs, but for many, the more important question revolves around ROI.
What is ROI for EV Charging Stations
Returns come in different forms and the same is true for EV charging stations which are capable of providing ROI on multiple different levels ranging from direct income to passive income, exposure, and more. Let’s take a closer look at those.
Exposure- From visibility on charging apps like Plugshare, to word of mouth among EV drivers, EV charging stations can literally put you on the map and introduce new people to your business.
Increased sales- Unlike a gas station where drivers can pop in and out, charging takes time, even with a DC fast charger. For retail locations and restaurants, that means EV drivers using your charging stations will be spending more time in your store and, likely, spending more.
Reputational boost- Research over the last 5 years has demonstrated, and confirmed, that consumers are not just looking for businesses that champion sustainability and other environmental goals, but they’re backing it up with their spending. That means an EV charging station on your property can easily translate into increased sales based on your reputation for ESG goals. This is just one reason that branded EV charging stations are good for business.
Charging Revenue- In addition to more passive returns, financial returns are also remarkable. Financial returns depend largely on a number of variables, including number of stations, traffic, charging time, charging fees, cost of electricity and more so it’s hard to give a concrete number of what anyone can expect to see. However, some EV charging station owners have been known to see returns of $10-20,000 a year.
Advertising- If you’ve been to a gas station, you’ve likely seen a pump with a video terminal and if you’ve used any commercial apps with maps or regional functionality, you know they can geotarget advertising. The same is true for EV charging stations and charging apps. While NovaCHARGE currently offers this, not every service provider does currently; however, next iterations will almost certainly include this option.
Of course, that revenue realization depends on a variety of things, including charger reliability, fee structures, and more.
EV Charging Business Models and Fee Structures
One of the things you’ll need to consider are the available business models and fee structures. For many EV station owners, these two factors can significantly impact revenue generation. There is, also, a Charging as a Service (CaaS) model, but because the site or business doesn’t own the EV charging stations, it will impact revenue, so we’ll look at other available models here to maximize your return.
Essentially, there are three business models available: free, fee, and hybrid. As you can imagine, free charging means just that and is often reserved for fleets or municipal EVs, though others may use it as part of the hybrid model for employee or resident perks/benefits.
The fee model, obviously, charges fees for EV drivers and the hybrid combines both fee and free charging.
While you’ve got some options there, where you have way more flexibility, in part depending on your charging platform management system (CPMS), in your fee structure. Much like you can determine whether or not a driver (or vehicle) can charge for free, you can also set fees are dependent upon other variables such as time, day/date, and demand or even the type of user including employees, residents, or public use. Similarly, if cars remaining at your chargers once fully charged is an issue, you can assess a fee for that as well so you don’t lose revenue.
For example, let’s say your business is in an area that sees particularly high traffic and demand during business hours. You can set dynamic pricing models that shift your fees to match both those variables. Similarly, you can make your charging stations more enticing off peak by dropping prices. Weekends busy? Adjust your fees.
Dynamic pricing can help ensure your fees are generating the revenue you need to hit your ROI goals.
How Your CPMS Helps Ensure EV Charging ROI
It’s important to note that ROI, particularly when it comes to revenue, depends largely on the flexibility and transparency of your CPMS. Of course, it also depends largely on ensuring you have networked EV chargers and a reliable charging network. If your chargers aren’t working, they’re not earning you money and your CPMS can, and should, help there as well.
Your CPMS can, first and foremost, alert you to issues with a non-functioning charger (if the charger is networked) and allow you to address problems that can be fixed by power cycling or a simple restart. NovaCHARGE takes it one step further and offers NovaBOT which can handle proactive maintenance monitoring and resolve level 1 concerns without a station owner or host taking any action.
In addition to supporting functionality and performance, your CPMS can help you adjust and program fee schedules. You can even set those fees based on reporting which can tell you when peak hours and demand are, allowing you to optimize your returns.
In short, the flexibility, versatility, transparency, and control afforded to you via your CPMS can help you get the most out of your EV charging stations by revealing revenue generating opportunities and helping you take advantage of those.
How Your EVSE Provider Can Help You Ensure ROI
It is, hopefully, clear to see at this point how an EVSE provider’s CPMS can help ensure your ROI, but there’s more to it than that. Because your ROI is directly related to your initial investment, it’s important to look at your EVSE provider through that lens as well.
Perhaps one of the most important aspects is the reliability of your EVSE provider’s network and hardware. As we’ve already stressed, you can’t generate revenue if your charging stations are offline, non-functioning, or even simply unreliable. So, when looking for your provider, you want to look for 5 9’s or 99.999% network uptime. You also want to be sure you’re looking at the charging station reliability as well as their warranty.
Another aspect to consider is that initial investment. When creating your EV charging solution and conducting a site analysis, it’s essential for your EVSE provider to understand what your site can handle based on the electrical grid. However, it’s also key that they understand power management and can help you maximize your space. This can help you avoid over architecting the site and overspending, increasing your ROI.
From the first moment you consider implementing and installing an EV charging solution at your site, there are a lot of decisions for you to make. Among them is who you choose to work with and even that can impact your ROI.
If you’re ready to work with a turnkey EV charging solution provider who’ll walk you through everything from site selection to implementation, ensuring you get the ROI you’re hoping for and maximize your EV charging program, then let’s talk.
At EV charging summits and conferences, our leadership team has discussed and shared both our understanding and our ideas related to ROI and we’re ready to help you achieve your goals. Get in touch with our team today and let’s get started!