Who Pays for Electric Car Charging Stations

As electric cars gain popularity, employers must figure out how to make commercial charging stations part of their facilities. More and more employees have expressed the need to “refuel” during work hours, and after the 2021 EV tax credit extension, this feature has changed from a perk to a necessity.

Who Pays for Electric Car Charging Stations?

Naturally, employers have loads of questions like who pays for these stations, what the infrastructure costs are, and who needs to bear the burden of the considerable expenses.

The good news is that there are loads of federal and state incentives and grants and subsidies that cover the cost of electric car charging stations. This way, you do not have to worry about infrastructure costs.

Market acceptance of electric cars largely depends on whether they can be charged easily in America. After all, electric car owners are always worried about running out of charge, especially when no stations are available.

States have also been debating on whether utilities should be able to work and allow electric cars to benefit from charging stations. Kansas, Michigan, and Missouri voted against using customer money to establish charging stations.

There has been close to no growth in utilities for several years as new energy sources are not integrated. Hence, many utilities are fighting to own and operate charging stations in an attempt to increase revenue.

The Debate about Charging Stations

Initially, California was unsure whether utilities should own and operate these stations because they did not want to deter private competition. Moreover, it was feared that electric car owners would be forced to pay some part of the infrastructure costs, even though only a minority of the population owned these cars. Hence, the Golden State stated that utilities would not invest in the infrastructure.

However, in 2015, this ban was lifted as California realized that if they wanted to meet environmental goals and encourage the use of electric transportation, then electric car charging stations were a necessity.

After all, there are many benefits of investing in an electric car, such as:

  • Lower carbon emission: Electric cars do not give out any direct emissions, but they use electricity that might be made with the help of fossil fuels. However, they are environmentally friendlier than traditional cars.
  • Lower maintenance: The maintenance for electric cars is significantly less than for traditional cars. The battery and electrical components have a longer lifespan, so they don’t need to be serviced as often.
  • Cost-effective: With an electric car, you spend less on fuel which means that in the long run, you save costs.
  • Fuel economy: Electric cars are cheaper than gas because they use electricity.
  • Better performance: As opposed to traditional gas vehicles, electric cars are quieter, and you can expect minimal noise.
who pays for electric vehicle charging stations
who pays for electric vehicle charging stations

Read Electric Vehicle Charging Station Requirements in California

How States Have Come Together to Build Electric Car Charging Stations

Californian public utilities are excited to build charging stations. Southern California Edison announced that in five years, they are aiming to collect $570 million that can be invested in 50 charging stations that will allow electric cars to be fully charged in under 30 minutes.

These funds will also be allocated towards building charging stations for electric trucks and buses, as well as putting rate incentives in place to urge electric car owners to charge their vehicles during off-peak hours.

Southern California Edison also plans on installing 1,500 basic level 2 chargers at multifamily homes and workplaces. The plan is to incorporate third-party charging stations and network providers.

Moreover, Pacific Gas & Electric has encouraged the construction of 7,500 charging stations in three years by allocating $130 million to build infrastructure in northern and central California. This is set out to be the biggest deployment of electric vehicle charging stations in the entire nation.

Pacific Gas & Electric plans on owning and maintaining charging stations built by third-party vendors in markets lacking necessities, such as workplaces and complexes found in disadvantaged areas.

However, outside these disadvantaged areas, the company will not be responsible for any charging stations. They will only look after the electrical needs from the power line to the stations.

San Diego Gas & Electric also jumped on board and allocated $45 million in funds for the use of utility-operated charging stations. They aim to install a total of 3,500 stations at 350 different locations, including apartments, businesses, and other communities that fall within its territory.

In Texas, on the other hand, the law is that only utilities can own and run charging stations. Electricity providers must prove they have the technical and financial resources to provide electricity to locals within the area before being employed.

Due to this, Texas private entities are not allowed to own or run electric vehicle charging stations. As a result, companies have tried to find a solution and joined hands with electric companies that are municipally owned so that charging services are provided legally. This has allowed utilities to actively install charging stations around the state and in urban and underdeveloped areas.

Read Hidden Costs of Owning an Electric Car

Installing Commercial Charging Stations- Costs

Before we explain who pays for these stations and how you can offset costs, let’s find out how much it costs to install electric car charging stations.

Rocky Mountain Institute in Newyork is an organization that focuses on renewable energy. It published a report that looked into the costs of EV (electric vehicle) charging stations and found that the bill would depend on the charging infrastructure.

Usually, level-2 chargers cost between $2,500 to $4,900. On the other hand, DC chargers can cost between $20,000 to $150,000 based on the output power and speed you are looking for.

However, this is just the price for the chargers. You must also take care of some electrical needs when installing charging stations. This means investing in electrical transformers, which can cost anywhere between $35,000 to $173,000 each, cables, which can cost anywhere between $1,500 to $3,500 each, and credit card operators, which can cost between $325 to $1,000 each. Of course, you also need network and data contracts which amount to a couple of dollars each year.

Once you have taken care of all your electrical needs, there are some installation costs that you need to pay for the chargers. Together, everything can add up pretty fast. However, the good news is that you alone do not have to pay for everything.

who pays for electric car charging points
who pays for electric car charging points

Subsidies and Partnerships

If you are looking to reduce your costs, there are some incentives like subsidies and rebates that you can look into. Other options are also available, but they require some planning.

1. Utility Rebates

Throughout the United States, there are loads of utility companies that provide rebate programs to commercial customers in an attempt to help them install charging stations for electric vehicles in their facilities.

Some programs, for example, AEP Ohio, cover the full costs of the operations. If you want to add an EV charging station to your facility or property, the first thing you need to do is contact your utility provider.

2. Tax Credits

When it comes to alternative fuels, the federal tax credit is high- 30 percent of the costs of putting an electric car charging station can go up to $30,000. However, these previous rates were supposed to expire by 2020. Due to the new presidential administration, these rates are still applicable, but we aren’t sure how long.

If you are looking to lower project costs, there are other local and state tax grants and credits that you can look at depending on where you are in the US.

3. Creative Solutions

Other than rebates and direct credits, there are alternate ways you can use to lower the cost of installing charging stations. You can get in touch with businesses around you to see if they want to share the station’s costs so that they can also benefit.

Short- and long-term costs can also be lowered by planning everything correctly and avoiding infrastructural mistakes. You must place the charging station to minimize the length of the conduit if you want to save costs. However, you also need to ensure that sufficient infrastructure is installed so that there is room to expand.

4. Long-Term Advantages

If you are considering installing an electric car charging station, it is one way to stay ahead of your competitors. This is a common feature that loads of employees are on the lookout for, so you should view this as an investment for yourself and for the success and growth of your company.

As talented individuals become a part of your business, your profits will also start to grow. These stations can also help individuals transition into a work environment after spending two years in lockdown due to the pandemic. As your business attracts more foot traffic, it will also become more competitive.

Installing electric car charging stations can be a smart move for your business or property. However, you need to be aware of the costs and benefits.

who pays for public electric car charging stations
who pays for public electric car charging stations

Read Can You Get Federal Tax Credit for Leasing an Electric Car?

Building Electric Car Charging Stations

In most countries, property owners have to pay for their charging stations. They can use creative options, tax credits, incentives, and utility rebates to lower some costs.

Even though installing electric car charging stations is an expensive cost, a couple of options help cushion the flow. Federal incentive programs are used to handle the costs of infrastructure or the costs of setting up the charging station in totality. Utility rebates have also started to cover up to 100 percent of all costs in some states.

Here are some options to keep an eye out for:

Utility Rebates: Look for utility companies offering rebate programs that take responsibility for 100 percent of the costs. This is so that commercial customers do not have any trouble installing charging stations in their facilities. The best part is that these stations become an attraction amongst customers, and since owners can now demand charging fees from users, they benefit in the long run.

Tax Credits and Incentives: Since electric vehicles in the United States have many environmental benefits; you can look for state and local grants and credits that are provided to those who want to build electric car charging stations but need some help with the costs to do so.

Community: If you cannot use incentives or rebates, your last option is to think outside the box. This means getting in touch with neighboring businesses and coming up with an arrangement that will allow everyone to pitch in and share the costs of building a charging station.

Once all this has been figured out, electric car owners in the US can be offered to charge their vehicles for free, or they can also use nationwide charging networks like EVgo or Chargepoint.

However, before you invest in an electric vehicle in the United States, make sure to think about car insurance coverage. Do all your research beforehand so that you are aware of coverage options and insurance changes in case any adjustments need to be made.

The biggest advancement for states has been giving utilities the green light to establish electric car charging stations to help with customers’ range anxiety while catering to business models.

However, since electric cars are still owned by a minority of citizens, using ratepayer dollars for infrastructure does not seem fair. Instead, utilities can use their skills and engineering expertise to run and operate charging stations. This way, they can also ensure that customers are using the service payment options.

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