Pricing Workplace Charging

Abstract

Overnight home charging is expected to be the most common and cost-effective way of refueling plug-in electric vehicles (PEVs). Workplace charging is also expected to play a prominent role and provide various benefits, such as extending the number of electric miles driven and enabling PEV adoption by drivers in difficult residential charging environments. This paper assesses workplace charging from two perspectives: ( a) employers investing in workplace charging facilities and pricing their use and ( b) employee drivers. The finding is that pricing levels likely to provide drivers with financial motivation to fuel at work relative to gasoline refueling may provide limited opportunity to recover station costs. For example, a $0.20/kW-h markup on top of average commercial electricity costs–-a level some drivers may even find uncompetitive–-might only cover $1,500 in all-in facility investment costs per PEV served. Similarly, drivers may balk at workplace charging prices at or exceeding $1.25/h or $35/month, which provide comparable cost-recovery potential. In addition, the differential, “discriminatory” impact of various pricing structures is discussed. Across pricing structures, increasing the utilization of a facility (i.e., increasing the economies of scale in use) is key to improving financial viability. This might prove difficult, given the associated costs described. Solutions that increase utilization while minimizing per vehicle costs (e.g., “multiplexed,” perhaps lower-power facilities) might help address these constraints. Monte Carlo simulation is presented to highlight the key uncertainties of station profitability and of refueling costs. It indicates that employers’ choice of pricing structure will differentially affect their ability to remain financially viable in the face of uncertainty.