Pricing Workplace Charging: Financial Viability and Fueling Costs

Revised: November 15, 2013

Overnight home charging is expected to be the most prevalent and cost-effective way to refuel plug-inelectric vehicles (PEVs). Workplace charging is also expected to play a prominent role and providevarious benefits, such as extending the number of electric miles driven and enabling PEV adoption bydrivers in difficult residential charging environments.

This research assesses workplace charging from two perspectives, 1) employers investing inworkplace-charging facilities and pricing their use and 2) employee drivers. It finds that pricing levelslikely to provide drivers with financial motivation to fuel at work relative to gasoline refueling mightprovide limited opportunity for station cost recovery. For example, a $0.20-per-kilowatt-hour markup ontop of average commercial electricity costs—a level some drivers may even find uncompetitive—mightonly cover $1,500 in all-in facility investment costs per PEV served. Similarly, drivers may balk atworkplace-charging prices at or exceeding $1.25/hour or $35/month, which provide comparable costrecoverypotential. Additionally, the differential, “discriminatory” impact of different pricing structures isdiscussed.

Across pricing structures, increasing facility utilization (i.e., increasing economies of scale in use)is key to improving financial viability. This might prove difficult, however, given associated costsdescribed herein. 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 key uncertainties of both station profitability andrefueling costs. Importantly, it indicates that employers’ choice of pricing structure will differentiallyaffect their ability to remain financially viable in the face of uncertainty.

Keywords: plug-in electric vehicle, workplace charging, pricing, recharging costs, profitability, cost recovery