Free Electric-Car Charges Start To Depart; What's A Fair Fee?

Coulomb electric-car charger, Madison, WI

Coulomb electric-car charger, Madison, WI

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Plug-In electric car drivers in several regions have enjoyed free public charging at many locations. But lately, some businesses that offer charge stations have started to require payment by credit card. 

All of these charging stations were installed with Federal grant funding, so the business owners did not pay anything for what is presumably a way to attract plug-in drivers to their premises.

One example: Walgreen’s drugstore chain has Coulomb ChargePoint stations at many of its California stores. Those stations now cost $2.00 an hour for charging, as do similar Coulomb stations at the Vacaville Outlet Mall. 

But because the highest-volume electric vehicles have only 3.3 kW/hour onboard chargers, their owners pay $2 for (at most) 3.3 kilowatt-hours of energy.

The low-volume 2012 Ford Focus Electric and the California-only 2012 Coda Sedan can recharge at 6.6 kW, meaning they can add up to twice as much electric range for that same $2 fee.

This seems like a somewhat inequitable pricing system, whatever the cost. Imagine buying gasoline by the minute, regardless of whether you could pump it in the conventional way or had to add it through a soda straw.

Perhaps with the higher-capacity 6.6-kW inverter coming in next year’s 2013 Leaf, and the 10-kW inverter in the new 2012 Tesla Model S, a rate of $2.00 an hour might be more reasonable.

But for today's Nissan Leaf, Chevrolet Volt, and Mitsubishi i, all limited to 3.3 kW per hour, it translates to a very high price compared to overnight home charging.

“If someone charges at $2 an hour at 3.3 kilowatts, that's 60 cents per kilowatt-hour, which is very expensive," notes Jeff Paul, an energy specialist with the Sacramento Metropolitan Utility District.


He called that rate "paying full price," comparing it to "buying gas for a car that gets 28 mpg.”

Home electric rates vary widely by location and time, but generally run from 3 cents to 25 cents per kilowatt-hour. A Nissan Leaf owner may thus pay as much as 20 times the home-charging rate when recharging at Walgreen's.

Two-dollar-an-hour charging "means paying the same as the driver of a 24-mpg [gasoline] vehicle," notes Mark Williams, an air pollution specialist with the California Air Resources Board (CARB) during an internet discussion of the new fees, and "some folks have said that's OK."

"The difference is that we should also be amortizing the cost of a replacement battery into our fuel costs.  If a replacement battery costs $10,000 after 100,000 miles, then our per-mile cost is $0.10 and the 12 miles I can charge in an hour has a built-in replacement cost of $1.20."

"So in reality, we're paying $3.20/hour," Williams concludes, "which is the same as the driver of a 15-mpg [gasoline] vehicle.” 

Last week, Sacramento’s municipal parking authority announced it will install 28 Level 2 charging stations in parking ramps around the city center, and they will be free to use. As a further incentive to use emission-free vehicles, Sacramento offers free parking passes to those drivers for some city parking garages as well.

So, what is the reasonable cost for using a charging station at a business setting?

And is it reasonable to use pricing mechanisms to prod electric-car owners to recharge at night, when the electric grid has far more spare capacity than it may on a hot, smoggy, summer afternoon?

Leave us your thoughts in the Comments below.


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Comments (44)
  1. I think they should continue with the "free" model at least for a few more years.

  2. Interesting calc. So the fact that my Better Place subscription is so much more expensive than domestic electricity (but includes unlimited public charging and battery switches) doesn't look so dumb.

    George is spot on with the amortization of the battery cost. If you own your battery and only charge at home, you are deluding yourself if you think the cost per mile is the cost of the kWh you put in.

  3. And if you rent your battery, you are deluding yourself if you think you are paying an even higher price than owning. Renting always costs more.

  4. If capital appreciates, renting is a bad deal, if capital depreciates renting can be a very good deal. Same in the property market. I don't believe any battery in a private car is an appreciating asset, the only question is on how fast they really depreciate.

    And I'm able to use any charge spot in Israel for no additional fee and with nothing more than a wave of my key fob to open a charge port.

  5. Obviously a battery is a depreciating asset, the question is will it depreciate faster than what it would cost to lease it in which case leasing is the better option. It all depends on your expectations regarding the capacity loss curve your battery will show. First signs are that people living in a hot climate might be better off renting, at least with the sort of battery Renault/Nissan is using.

  6. And as I can testify as I keep ducking out to my balcony to tend a BBQ and mercifully coming back into the A/C, Israel is a hot place.

    Also note: when Better Place quick charges batteries at the switch station they externally cool them first and keep them chilled externally while charging. Something no owner of an in-situ battery can do with regular equipment.

    So the depreciation is less for BP than it would be for me without their equipment. Also note: they have bulk selling power when end of useful life is reached, something no individual owner will have.

  7. Brian, With all respect, this has got economics all wrong.

    Whether a battery is a appreciating or depreciating asset, it will be so for the person renting it or the person buying it, even if the person buying it is a corporate entity planning to rent it. The person buying it will suffer the loss of depreciation and adjust the rental accordingly. Also, the person (or corporation) clearly intends to make a profit which comes at the expense of the renter.

    Please go rent some furniture (another depreciating asset) and tell me if it is cheaper than buying. Renting is now, and will always be, more expensive.

  8. Lets say you bought a $1,200,000 home in Florida in 2007 and started paying property taxes and maintaining your home.

    Your neighbour started renting for an extortionate $5,000 per month. He paid $60,000 per year.

    After 4 years you both left. The renter paid $240,000 and you finally accepted an offer on your home of $500,000 after 6 months trying to sell it.

    Which one cost more?

  9. We have same discussion in Amsterdam/Netherlands. A reasonable price for public charging is €0,28 / kWh which is comparable to electricity price at home. A small premium is acceptable for the extra service. For DC fast charging the price is higher, about € 8 for full charge + subsciption fee. In my opinion the property owner should cap the price that the charging station supplier is asking and the EV market is not yet ready for $2 per hour.

  10. In your piece you mention Tesla-S can charge at a 10kW rate, but you should not have included it as public Electric Vehicle Charging Equipment (EVSE) can only provide ~6kW. So, readers should ignore that part as it is bogus, does no.

    In Silicon Valley, CA the Stanford Shopping Center has their 2 Coulomb CT2102 EVSE set to cost $2/Hr whether using the Level-2 coupler (6kW max ability) or the Level-1 outlet (1.5kW ability).

    As the piece did mention the majority of Leaf drivers only use 3kW or ~$.50/Hour of elecricity, a $2 turns away drivers from using their EVSE. Since envolking their new $2/Hour rate, those 2 EV spaces have gone unused. Are they keeping the riff-raff out?

    A better and more fair rate would be $1/Hour.

  11. Just another problem for "PURE EV" owners (Where is EV Enthusiast when you need him/her).

    I think $0.50 is reasonable price to charge by the station owners. At $1 to $2.75 (highest I have seen), a 40mpg ICE car makes more sense...

    This is just another reason to get Volt instead. To hedge against "E-gouging"...

  12. In the current EV environment,everything is scrambled. And with my belief in the imminent appearance of very fast charging batteries and their instant adoption by all EVs, order will come to the scene, and those public level 2 chargers will be instantly removed, possibly finding new homes in people's garages.
    But right now owners of charging stations who charge by the kWhr
    would naturally want to sell as many kWhrs as possible, thus will
    suffer if slower charging vehicles show up. Thus the logic behind hourly rates. There are also the unknown costs : what's the cost of keeping his chargers working? I don't find it surprising that operators have varying ideas on what price they should charge.

  13. Is there a maintenance charge included? I could understand if the hourly rate includes a small maintenence charge that goes toward future service and repairs.

  14. there is a benefit to high charging prices, that is, if the charging station owners start making big profits, more people will install charging stations.
    That means having an electric car becomes more convenient, if slightly pricier.
    Look at ATMs, for the longest time, ATM fees were regulated, so, banks only put ATMs out to serve as "Marketing leverage", when independent ATMs that could charge any price came out, suddenly every barber shop, convenience store and bar had an ATM. Sure the prices were highway robbery, but if you desperately needed $100, you could get it anywhere. Then the market saturated, usage fell, fees came down and it got into an equilibrated market.
    Same with Pay Phones, when they were a regulated business,

  15. there were a reasonable number of pay phones, but the Commrcially operated Coin Operated Telephones began to sprout like weeds in the 80's
    until the business collapsed with cell phones.

  16. I will pay for a charge, but only based on the kilowatts that I use. Being charged based on time shows either ignorance of how EVs are charged OR blatant greed on the part of these businesses. Taxpayer supported grants were used to install these chargers without any private funds required. Allowing these companies to benefit at a rate which defies reality is akin to the usurious rates charged by check cashing companies. If utilities are regulated by the PUC, and these charging stations are using regulated utility power, why are they also not regulated to prevent price gouging?

  17. b/c FERC doesn't allow them to charge by KWh. Only utility companies are allowed to "sell power". Those charging stations are charging you for time occupany and equipment depreciation.

  18. It is legal to charge by the kWh in California. Your local area may vary.

  19. Also now legal to charge by kWh in Colorado. Most other states are likely to follow. $2 is way over the top, even at peak load periods. Essentially the chargers should have variable kWh costs depending on the time of day, so that users can get the best deal.

  20. In many states It is against the law for anyone but the electric utilities to sell electricity. So unless the charger is owned be the utility you are paying a parking fee and the owner of the parking spot is giving the electricity for free. The rate can't be tied to the amount of electricity you use. Here in the Orlando area OUC
    (the local power company) has installed a number of charg3ers in the area. Those chargers can charge.

  21. The much maligned Israeli Govt policy on Plug in EVs which disallows uncontrolled charging from wall sockets, and which I wrote about a while back, actually mandates as and when we have another charge point supplier in Israel, Better Place is obliged to sort out a roaming agreement with them. How they will deal with payment is obviously still only theoretical.

    It is possible they'd charge a small micro fee from me for using a roaming spot but it's hard to see I would do this unless it was essential to cut out a free battery switch on a certain route.

  22. If a charging spot owner could sell on average 5 charge hours a day (which I reckon will be a challenge) and would have to pay $0,08 per KWH himself, $2 per hour would net him ~$2700 per year once 6.6KWH on-board chargers become the norm. Sounds like a not particularly unreasonable sort of revenue to make installation and maintenance worth his while.

    If what the owner of the charger needs to charge to make it worth his while is so high that it makes driving an EV no longer worth it's owner's while, that's another sign that level 2 charging is a dead end and fast charging is the future.

  23. Level 2 charging is not economically viable ON ITS OWN. If its part of some much larger service there is a much better argument. Better Place charge spots in Israel in public are mostly there to help owners avoid switching batteries: if there is one at my destination in Jerusalem, for example, it stops me switching battery on either leg of the trip.

    That helps keep demand at the switch station down so keeping the number of very expensive stations down. That's much more value than any one charge spot is worth on its own.

    In other situations, the cost of collection is probably ridiculous compared to the cost of the electricity.

    Better Place install their charge spots at for free: no installation or operating cost for the property owner.

  24. Since most people charge up overnight at home, and only occasionally use public vehicle charging stations - I think it's reasonable to expect to pay more for the convenience of charging while out of town (away from home).
    However, typically retailers charge 100% above their costs, which should only translate to 20 or 30 cents/kWh, not 60.

  25. @ Brian

    I think it's going to be tough even for BP to make level 2 charging work economically. I mean, what are the chances of there really being a level 2 charger present at your destination in Jerusalem? Would you park a few blocks away from your actual destination for a few extra miles of range?

    Seems to me people will only use level 2 if it's convenient, which means it needs to be available absolutely everywhere and that means a huge investment. I doubt the need for less battery swapping could compensate for that.

  26. BP don't intend to make money on Level 2. It's purely a supplement to home charging and intended to reduce load on the switch stations I believe.

    And yes, thanks to Better Place, I now will preferentially walk 800m to park somewhere with a certain charge spot: finding parking in Jerusalem is such a nightmare anyway. Now that I've found a couple of parking lots I can rely on I'm actually rather happy. Street parking might be a bit cheaper but not by much and I like the places they have chargers. It also means I can do the round trip without swapping battery which does save me time.

    Jerusalem can barely cope with donkeys. Cars are a hell of a leap and I would be very happy if quite a few more were quiet and non polluting like mine.

  27. Yes, I can certainly see how access to parking space could be a big perk in an old city that was probably designed with only the odd donkey in mind. Of course if BP is as successful as they hope to be that advantage might turn into frustration if one finds the coveted spaces systematically hogged by other subscribers. A single car could hog the space all day while the owner is at work (such as yourself if I understand your 800 meter remark correctly?) That is if it isn't "ICED over", defective or vandalized to name just some of the potential risks of this sort of charging.

    Also I'm surprised to learn these parking places are at a premium. It was my understanding the BP subscription was all included.

  28. Chris O

    The parking for charging in the Mamila mall that I was referring to is the same cost as regular parking. There is on street parking around there but it's very hard to find and is a little cheaper. BP has 12 spots, far from the entrance. I've seen them all iced but only once when I left at around 10:30pm on a very busy night for Jerusalem. I arrived nice and early to have no problem.

  29. "Sounds like a not particularly unreasonable sort of revenue to make installation and maintenance worth his while."

    Not reasonable, however, if the charger and installation were paid for by the taxpayer.

  30. 2 things: first, leasing is a more practical option, especially with the Leaf, because we hope that the traveling range will increase soon, Nissan has already introduced the 636 kw/hr charger into the 2013s, speeding at process up some. Once the range passes 250 miles, sales will take off. The current models will either be obsolete or need to b e retrofitted. So leasing makes great sense (a) because the payments are lower and (b) you're protecting against obsolescence. If the range gets over, say , 250 miles, then people won't mind overpaying ab bit for a charge on the rare occasions they get stuck on a longer trip or won't make it home at night. I sell Leafs, btw.

  31. How difficult is it to swap out the Leaf's battery?

  32. I think Larry is talking about leasing the whole car, I don't believe Nissan offers a battery lease only option anywhere but I could be wrong.

    Renault mandate battery leases in the UK and EU.

    Better Place make battery leasing mandatory. I own my car, but not the battery. Obviously my battery can be switched in 5 mins but only in a suitable station. I guess without the robot it could be done with a car lift in 30 mins.

  33. the flat rate charge will simply turn off many people who might use them. they need to go to a usage based fee structure, plain and simply. charge a base rate per Kwh for the first X KWh. then a higher rate beyond that. this makes it attractive for opportunity charging and discourages camping

  34. If the car is only drawing 15 amps like the Leaf then 2 dollars per hour is way too much.

  35. 50% over the going business-cost of electricity per kWh. If businesses pay .08/kWh, charge at .12 and then multiple my the draw rate. A 220V 15A draw is 3300W/hr - so that is 3.3kWh or about a fair value of .50/hr. Fast charging at 6.6KW would be $1.00/hr. Volt drivers can avoid any of this if they don't mind a few miles on gasoline. The number of EVs "in public" really does not proclude a public infrastructure "yet". Maybe 2015.

  36. in other words - they need to charge based on kWh used and not by time. Just like gasoline, they are delivering "units" of energy of kWh and not units of time.

  37. The cost should reflect the actual non subsidized cost to maintain and provide the charging stations; that would put an end to this superficial fuel alternative.

  38. Yes, to be sustainable, a viable business model must be found.

    While I agree that charging by the kWh is preferred, one also must realize that simply parking in front of a charging station (often in a high demand location) incurs costs.

    Also, installing public charging infrastructure is EXPENSIVE. It can cost $10-20k to get a L2 charging station installed due to trenching costs, meeting ADA requirements. Don't forget maintenance and insurance (more applicable to DCQC), too.

    People like to compare public charging cost to the cost of electricity (or the incremental cost of charging at home), but fail to realize just how much providing public charging infrastructure costs.

  39. Does the $2 include parking.

    In which case in any UK City that would be an absolute bargain.

    Parking some parts of London is more than the minimum wage !!

  40. To comment on battery replacement cost, the costs quoted in this article are probably not accurate, according to another article here:
    It is quoted as $10,000, and a more accurate figure would be less than $5,000 easily.

  41. The current reality is that public charging is so sparse and demand is so low that they can charge whatever they want and it won't make much difference -- to the operator's bottom line or to the public. I would only use a public charger if it was convenient AND I thought I needed it to get home. If the situation was particularly dire, I would drive out of my way to get a charge and the cost would matter even less. When chargers are free, people will use them even if they don't need to. That makes them unavailable for people who really do need them. For that reason alone, I think there should be at least a nominal fee for charging in parking lots that are otherwise free.

  42. I think Public chargers should be two part pricing. 1. Charge for KWh. 2. Charge for time occupancy. So you don't have people with full battery holding up the spot. Tiered pricing is probably the best. The first so many KWh is at $0.50 for the first 4 hours, then after that, the time rate dominates for $1/hr...

  43. Fair is not an issue. It's what the market will bear. I'm paying about 6 cents/kwh at home and am not willing to pay much more elesewhere unless its an emergency which it never is in my Volt. If I was stuck out in the wild with a battery only car then I would pay quite a bit to avoid a tow charge.
    If I was in the business I'd do something like a 40-100% margin on electricity with a 1 yr. paydown on the equipment. If that wasn't competitive I'd abandon the market.
    Stop with the daytime charging scare. Charging an EV is a fraction of cooling a house. (more on the order of running your electric clothes dryer)

  44. the answer is simple, its free. Shopping outlets will provide the energy at no cost. They will gladly do it as it will prove to be the cheapest way to produce a buzz about their business and get walk in traffic for pennies.

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