By Nancy E. Pfund:
Making charging stations available to drivers at home will be key to moving electrical vehicles beyond a niche market, and utility companies are in the unique position to make this happen.
Like rooftop solar—now one of America’s fastest growing industries—electric cars are poised to hit their tipping point. As we’ve seen with other clean energy technologies, each product generation brings rapid improvement. Starting this fall, the second generation of electric cars will be arriving at showrooms —starting with the Tesla Model X and Chevy Volt – offering greater range and more model choices.
As with renewable energy, taking the electric vehicle market to the next level will require big investments in creating a robust network of public charging stations and creating new business models to make such investments worth it.
It has been widely recognized that the lack of publicly available charging infrastructure – including at workplaces and apartment buildings —is a key barrier to mass adoption of electric vehicles. The infrastructure gap is in large part a “financing gap.” As a recent National Academies of Science study on electric vehicle barriers confirms, it is hard to identify any standalone private sector entities that have an “attractive business case for absorbing the full capital costs of investments in public charging infrastructure.
Utility companies are in the unique position to finance charging stations because they can capture the grid-wide benefits of large-scale electrification, especially the benefit of greater utilization of fixed assets. However, the conundrum for owners of charging stations is that while a safety net of more stations is needed to drive sales and further reliance of cars using electricity for their fuel, the vast majority of the charging is still likely to happen at home. By creating incentives for home charging to happen duringoff peak hours, utility companies can generaterevenues that exceed their cost of service, even with time-of-use rates.This is because the distribution system and other fixed assets are sized to meet peak loads and thus are underutilized during off-peak hours.
To read the full article, visit Fortune.