Examining Incentives for Electric Vehicles and Chargers

Electric utilities in the US and Canada have embraced Electric Vehicle and Charger incentives rapidly in the last few years. Combined with incentives offered by state and local governments and organizations, almost every state is offering some financial inducement to drive or charge electric vehicles. 

The benefits of incentivizing electric vehicles and chargers vary from constituent to constituent but like many changes, they have some potential unintended consequences. For electric utilities the benefit seems pretty clear: more electrons are being sold with EV, so higher revenue. 

The potential issue is that they do not have enough generation to handle a sharp increase in load on the grid.  For people and the environment, EV means less vehicles producing carbon.  The challenge is that the benefit will only be achieved with a matching reduction in the use of fossil fuels in electric generation.  

The focus of this article is on utility incentives for EV. Non-utility entities like governments and other non-profit organizations may also offer EV incentives, but they are not included in this analysis.

Definitions

Electric vehicle
For utility programs, electric vehicles incentives can be found for several vehicle types: passenger cars, trucks, refrigerated trucks, school buses, forklifts, motorcycle, bicycle, hybrid, plug-in hybrid, battery EV, and fuel cell EV. Utilities can incentivize one, several, or all of them. 

Chargers
Utilities vary their programs based on whether the use case for the charger station is residential or commercial. The incentives can be applied to the cost of the charging equipment and in some cases the cost of the infrastructure as well. The types of charging equipment are level 1, 2, 3 as well as high frequency battery chargers for forklifts. 

Data Analysis

The EV Utility Incentives By Customer Class map shows states where at least one electric utility offers either a residential or non-resident electric vehicle incentive.  Light blue is residential, the medium blue shade is non-residential, and dark blue includes residential and non-residential.

The EV Charger Utility Incentives By Customer Class map shows states where at least one electric utility offers either a residential or non-resident electric vehicle charger incentive.  Light blue is residential, the medium blue shade is non-residential, and dark blue includes residential and non-residential.

The Fine Print

Like any other technology that utilities incentivize, there can be a lot of program requirements that aren’t highlighted until it is time to apply for the incentive. We’ve listed a few notable ones below:

• Pre-approval: Some programs require filing paperwork before purchase of equipment
• Approved product lists: Some programs have developed listed of approved products from manufacturers
• Minimums: Utility may require a minimum number of chargers to be installed to qualify
• Building type: Utilities may limit or vary incentives by building type
• Purchase / lease / new / used: Utilities may incentivize some or all types of electric vehicles
• Required enrollment: Program may require enrollment in demand response or other programs for a set period of time in order to receive an incentive
• Data sharing: Some programs require data to be shared with utility for a set period of time in order to receive an incentive

The Future

Technology changes will continue to be a major force in how utilities incentivize EV. Battery life, vehicle range, and faster charging can all be factors in consumer and business adoption and utility program design will change in step.  

As more vehicles are converted and place demand on the grid, utilities will need to respond with more incentives around when and how EVs are charged and how the rates they charge may change. As EVs become more prevalent, utilities and non-utility entities may differ in how much they emphasize EV incentives. Utilities may offer incentives until the last vehicle has been converted to electric, while non-utility entities are subject to reallocation of public funds based on other priorities. 

Get your copy of the EV Charging Report to see a list of US & Canadian electric utilities that offer incentives for purchase of EVs and EV Charging Equipment! Both residential and nonresidential included! Get the report →