Enhancing Property Value ROI with EV Charging Stations

By Joseph Tohill

Maintaining a progressive, forward-thinking corporate image is crucial for companies in the commercial real-estate industry. Not only does this improve a company’s reputation and competitiveness, it will increase profit margins in the long-term.

One of the latest developments to hit the commercial real estate industry is the installation of EV charging stations. More and more developers are recognizing the benefits of providing infrastructure for the emerging EV economy.

And although the EV market is still in its early stages, there are competitive advantages to be had by installing EV charging stations at commercial real estate developments. In particular, EV charging stations can enhance property value ROI because they provide a much needed amenity for the emerging EV economy.

The Emerging EV Economy

Although the EV market only saw tepid gains in 2011, EVs are gaining traction as a form of transportation and will become an increasing share of the automobile market over the next few years. Nearly every major automaker has an EV in the works, and reports from Pike Research suggest EVs could feature a 43% compound growth rate between 2011 – 2017, with annual sales achieving 360,000 by 2017.

However, the biggest issue faced by EV drivers is where to charge their cars. Although charging can typically take place at home overnight, there is a demand for charging stations during the daytime. Commercial real estate developments are in an unique position to be able to fulfill that market demand for charging stations, and increase property value ROI in the process.

What Value Do EV Charging Stations Provide?

Unlike other amenities, EV charging stations are valuable at almost any commercial real estate development .Whether it’s an office building, a hotel, an apartment complex, or a convenience store, the value of an EV charging station should not be underestimated. EV owners that visit or reside in these locations reap great benefits by having access to charging stations. And since they will be in these places for an extended period of time anyways, they may as well make the most of their trip by charging their EVs.

The Influence of EV Charging Stations on Property Value ROI

Although EV charging stations require an initial monetary investment, the multiple benefits they provide can more than offset (or even pay for) their initial costs.

Take an office building, for example. As increasing numbers of people drive EVs, they will always be on the lookout for places to charge their cars. An office building is an ideal location for an EV charging station, because it allows workers to charge their cars while at work. In an aesthetic sense, the charging station will make the building looking more cutting edge and sustainable. On the practical end of things, it provides a much need amenity for EV owners.

In a few years, EV charging stations could be one of the things that companies look for when deciding where to locate their offices. As a result, an office building with EV charging stations will feature decreased vacancies and improved tenant retention.

Ultimately, all of these variables improve the ROI of an EV charging station and can increase property values. And although the example of an office building was given, these variables also come into play in numerous other commercial developments.

People will still be driving cars long into the future. But as more and more people embrace EV’s, they will constantly be on the lookout for new charging stations. Commercial real estate developers are therefore in a unique position to capitalize on the increasing number of EVs on the road.

Joseph Tohill is a freelance writer and online communications specialist for organizations in the sustainability sector. He has a B.A. in Interdisciplinary Studies from the University of British Columbia and spent most of his academic career studying sustainable urban development; namely the interdisciplinary relationship between built form and natural environment.

Time of Use Pricing: Evaluating the True Cost of EV Charging Stations

By Joseph Tohill

Although EV charging stations are continuing to pop up in cities all over the country, they are still a relatively new addition to the urban landscape. As with any new technology, many people are asking questions about installing EV charging stations and how to ascertain an accurate cost-benefit analysis.

This article will look at how to determine the true cost of EV charging stations and how to recoup these costs by establishing an effective service plan that accounts for time-of-use pricing.

How Electricity Pricing Works

Although utilities across the country have numerous ways of calculating electricity costs, essentially what it comes down to is a charge per kilowatt-hour (kWh) – e.g. 15 cents/kWh. However, utilities are increasingly incorporating time-of-use (TOU) pricing in their billing plans. This means that the cost per kWh will be different over the course of the day to accurately reflect consumer demand.

Electricity prices during the daytime would be most expensive because this is when the most electricity is drawn from the grid (demand is high). But at night time, electricity prices would be cheaper because far less people are using electricity.

For instance, Pepco, the utility that services Washington D.C. and some communities in Maryland has TOU options for non-residential users. Under its time-of-use plan, Pepco has a rate structure that divides weekdays into on-peak, intermediate, and off-peak periods.

When it comes to EV charging stations, TOU pricing is the most accurate cost associated with charging an EV. This is because the cost of charging an EV could vary depending on the season or the time of day.

However, only utilities are allowed to charge per kWh. This means that EV charging station owners need to come up with their own pricing plan that properly accounts for TOU rates.

Recouping the Cost of an EV Charging Station

The first cost that would need to be factored in would be the initial capital cost for the charging station. This would of course vary depending on the charging station developer and construction costs.

The second element that would need to be accounted for would be the electricity prices. Since only the utility can charge per kWh, the station owner would need to develop a pricing plan that incorporates both the initial capital costs and the estimated electricity cost into one hourly rate. After averaging out TOU rates, it would typically cost about $0.80 to charge an EV per hour.

Then the station owner would need to determine what hourly rate to charge the user in order to both pay for the electricity cost and recoup their initial capital expenditure on the station. There is currently no regulation on how much a station owner can charge, so at this point it is totally up to them. With an hourly cost of $0.80, a station owner could charge $2.00 per hour, thus allowing them to pocket $1.20 per hour. Although this may not seem like much revenue initially, it could allow them to break even over the span of 2 years. After that two year period, they could turn a profit as more and more EVs hit the market.

The Benefits of an EV Charging Station

The time is ripe to reap the benefits of the emerging EV market. Demand for EVs is increasing, but the supply of new EV stations is still relatively low.

And although EV charging stations have the potential to become a profitable venture in the long-term, they provide many other benefits that are less easy to quantify. The presence of an EV charging station adds a sustainable and cutting-edge dimension to the places in which they are located. Their presence raises awareness about the EV market and visually informs EV owners of a new place to charge their car.

The earlier a prospective charging station owner installs an EV charging station, the better traction they will gain with their potential consumer base. Establishing a reputation as a “hot-spot” for EVs early in the game will provide them with a competitive advantage as increasing numbers of EVs hit the streets.

Joseph Tohill is a freelance writer and online communications specialist for organizations in the sustainability sector. He has a B.A. in Interdisciplinary Studies from the University of British Columbia and spent most of his academic career studying sustainable urban development; namely the interdisciplinary relationship between built form and natural environment.