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Buyer’s Guide To

Financial Programs Impacting Electrification

  • EV charging isn’t optional—but without the right system design and strategy, upfront costs and long-term demand charges can quickly escalate.
  • Incentives and financial programs can offset a major portion of costs—but only when integrated into a well-planned energy system that maximizes ROI over time.
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Three steps to consider to benefit from available programs.

For dealers, it really isn’t a question of whether to install electric vehicle charging stations. Dealers don’t have a choice. They’re being required to do so by their OEMs.

The questions for dealers are, how to go about it in the most cost-effective manner, or how can you spend the least amount of money and reap the maximum financial benefits?

The answers are multi-layered and complicated. 

First, dealers should work with a specialist who guide them through the planning, design, and installation process, as well as provide support in managing their energy use during the life of the system. 

Second, dealers need to be aware of and take advantage of the various federal, state, and local utility incentive programs intended to encourage businesses to transition to renewable energy sources and participate in the distributed energy grid. 

In that way, installing EV chargers becomes less costly by being a piece of a larger “system” that minimizes upfront costs and reduces utility costs on a go-forward basis.

Available programs provide substantial value but are interrelated and require some expertise to evaluate. The goal of this article is to touch on issues to consider as you evaluate options.

The design of your electrical system has a significant impact on the costs of electrification.

Be sure to consider your options and compare financial models for both upfront and operating cost implications.

Three factors impact these cost:

  1. A significant driver of EV charger installation costs is charger placement and its impact on trenching, conduit, and other costs.

  2. Utility “make ready” programs currently cover 50-90% of installation and electrical upgrade costs associated with EV chargers, depending on whether chargers are publicly available. This represents an opportunity to get to the optimal long-term configuration and to have the utility program cover a substantial portion of associated costs.

  3. Your ability to control long-term operating costs will be impacted by the design of your electrical system. Separately metering your EV charging will always result in higher net demand charges vs. combining EV chargers with other electrical loads. This approach also limits the impact of technology, such as solar and storage, on controlling demand expenses. Consider both upfront and long-term costs as you consider system design.

Several programs are available to offset the upfront costs of a clean energy system.

Including an analysis of these programs is an important part of your long-term electrification planning. 

Applicable programs include the following:

  • Federal Investment Tax Credit (ITC)
    The ITC allows taxpayers to deduct 30% of the cost of clean energy systems from their federal taxes. Costs associated with EV charging installation can be included under the ITC if the project is pursued at the same time.
  • Modified Accelerated Cost Recovery System (MACRS)
    MACRS allows clean energy project costs to be depreciated over 5 years, with 80% taken in the first year. This accelerated depreciation benefit offsets another 20% of the upfront project cost.
  • Rural Energy for America (REAP)
    The REAP program added over 1 billion dollars in funding to be available through the end of 2024 and now funds up to 50% of the cost of a renewable energy system, which could include solar generation, battery storage, and EV charging stations. A dealer must be a small business located in an eligible rural area to receive a REAP grant.
  • NY-Sun
    NY-Sun is an upfront incentive program currently applicable in Con Ed territory. Incentive budgets operate through a “block” program, with incentive amounts declining over time. Current incentives cover 30% of the cost of a solar installation.

Include the long-term costs of operating EV chargers as you evaluate scenarios for electrification.

Operating EV chargers is associated with significant utility expenses due to the “demand” in NY State. Simple changes in your electrical system design can create quick payback in demand savings.

NY State also has a new mechanism for compensating producers of energy created by distributed energy resources (DERs), like solar and battery storage.

This is termed the “Value Stack”, and it compensates projects based on when and where they provide electricity to the grid.

Compensation is in the form of utility bill credits. Calculating the bill credit is complicated and applies several variables, e.g., daily wholesale price and capacity value, to determine the credit to be applied to a dealer’s monthly utility bill.

This topic was the subject of a recent Bagels with Bieber webinar featuring Maria Fields and Dennis Quinn of Sprocket Power, and Leo Wiegman, Sustainable Westchester, Director, Solar Programs.  

The webinar can be accessed at: Dealer Rights, Responsibilities and Responses to OEM Demands.

Dealers are encouraged to discuss the application of any of the above-referenced programs to their unique situation with their attorney, tax advisor, or accountant.

Make Electrification Work Financially, Not Just Operationally

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