Electric Vehicles

Plugging Residents into EV Opportunity: How Utilities Can Address Gaps in Adoption

Gas-fueled cars and trucks are currently the largest single source of greenhouse gas emissions nationwide. Reducing emissions of carbon dioxide across the economy means getting more electric vehicles on the road, which will require making them more accessible to more drivers.  

As public power utilities are trusted energy advisors for their communities, understanding the barriers to access to EVs and working to address these gaps will be an important part of this role.   

Addressing Affordability

Top of mind for many drivers – especially people with lower incomes – is the cost associated with having a car.

In part because of an early focus on producing luxury EV models, the average upfront cost for a new EV is generally more expensive than new cars with an internal combustion engine. However, as more manufacturers produce a wider range of models and battery prices continue to decline, the upfront cost is quickly coming in line with gas-fueled cars. Bloomberg NEF forecasts that cost parity on new vehicles will be reached by 2024.

The total cost of EVs drops with tax credits, which the federal government and some states still offer on most EV models (the federal credits have expired for models made by Tesla and GM). However, tax credits only work when you have taxes due to take advantage of the benefit, and many people with low income don’t make enough in a year to see advantage from the credit. What’s more, tax credits can’t be carried forward for next year’s tax liability. If you can’t use the full credit during the year you bought the car, you simply don’t get the full credit.

But low-and moderate-income earners aren’t generally buying new cars, said Sherry Bryan, program manager with Ecology Action, a non-profit organization that helps people and communities adopt solutions for a low-carbon economy.

“Most low-income people are not able to afford the down payment and financing for a new vehicle,” she said. “Many are renters, and a car is the biggest purchase they’ll make. They’re looking at cars in the $6,000 to $10,000 range, so how do we get the purchase price of an EV down enough that people will buy them instead of gas cars?”

Peter Ambiel, associate programs manager at Peninsula Clean Energy, a non-profit community choice aggregator providing electricity for San Mateo County in California, cited a report from the International Council on Clean Transportation that predicted lower-income adoption may not happen until the end of this decade, when cost parity of EVs will fall in line with used ICE vehicles.

Some 70% of all cars sold in 2020 were bought used.

For people with lower incomes, financial incentives that can be more immediate are more attractive.

Bryan advocates grants be used to cover down payment costs that bring financing expenses down. These grants should cover both new and used vehicles, she said. So should rebates, which currently are available for new vehicles only.

Such programs – plus the inevitable expansion of the used EV market – may help get more EVs into the hands of lower-income drivers.

Getting over the upfront cost barrier will ultimately help lower income earners longer-term, who Bryan said typically spend about four times the proportion of their income on gas and car maintenance than people with higher incomes.

EV drivers already benefit from reduced operations and maintenance costs. A study into the levelized cost of charging by the National Renewable Energy Laboratory found that EV drivers can save thousands on fuel costs alone over the life of the vehicle. Potential savings were greatest for people in areas with relatively low electricity costs and when they had the option for a time-of-use rate.

Ambiel points to another issue, too: “Lower-income folks tend to have only one car, and that car has to serve a wide variety of needs, so they may need certain types of vehicles, like trucks or vans.” Available inventory, he said, might not yet accommodate such needs.

Charging Access

Even when upfront costs come down and more types of used vehicles become available, there’s another issue: where to recharge the vehicle’s battery. Often, the most economical option for drivers is to charge at home.

A 2019 study by the U.S. Department of Energy found that more than 80% of EV charging takes place at home, but not every home offers easy plug-in options. “We estimate that about 25% of our population is in multi-unit dwellings, like apartments,” said Melissa Garza, an engineer in the distributed energy resource team at Colorado Springs Utilities, a public power utility serving more than 200,000 customers in central Colorado. “They might not have access to residential charging.” The utility is focused on creating a plan to help people have access to three types of charging: residential, worksite and opportunity charging, such as charging stations in public places people routinely visit.

That’s easier said than done, particularly with residential charging in multi-unit dwellings. “Oftentimes, the outlets in multi-family units are not attached to the individual renter’s power meter. The outlets – if there are any at all – are attached to house power, the common panel where the landlord is paying for utilities,” Bryan said.

Her organization works to entice multi-family property owners to add charging infrastructure, but she said it’s a hard sell right now. “I can’t tell you how many times we show up on the scene, and property owners are actually walling off outlets to prevent tenants from drawing power,” she said. “There is no return on investment for a landlord to increase power, install a new transformer, or get infrastructure for tenants to charge. It’s just an amenity.”

There are options for property owners to make use of this power, including from regular wall outlets or level 1 chargers, available on a pay-to-use basis. Companies such as Plugzio offer a service where users can scan a QR code next to an outlet to activate power and charge to their account.

Bryan added that the for-profit charging market isn’t working for multi-family spaces right now either. “If you install a charger in a multi-family housing complex, there is no guarantee anybody will use it for a few years. There’s no market incentive for the vendors.”

Getting EVs and charging access to people with lower incomes may be challenging, but Peninsula Clean Energy, Colorado Springs Utilities, and Ecology Action are all working on it anyway.

“Undersized panels, both in older single-family homes and apartments, are something we are running into consistently with programs that we're doing,” Ambiel said. “Part of Peninsula Clean Energy’s charging program is that we developed a set of design principles to minimize installation costs and maximize the number of ports that we can install.”

First, Peninsula Clean Energy’s team figures out mileage needs of drivers in the dwelling. “Then we're going to implement technologies – like power management or using the level 1 outlets – to minimize the impact of that new EV charging load on the panel. We want to design within the panel capacity. If we cannot do that, then we want to design and build within the capacity of the transformer serving the building. We don’t want to trigger a transformer upgrade,” Ambiel said.

Ecology Action, which works with power providers around the country, has a similar approach. “Our key recommendation for trying to sell multi-family charging is make it free and make it so there’s no hassle for the property owner,” Bryan said. “That means a program comes in and does a site assessment, analyzes the power that’s available and creates a solution that fits the parking and operational needs.”

Colorado Springs is still in planning phases of its EV program, but Garza said the utility is also considering a “full-service model, where the utility comes in, takes care of installation and covers that cost over time, taking away that upfront burden.”

Other initiatives being considered in Colorado Springs include:

  • Rebates for owners of multi-family properties or commercial sites
  • Utility-owned charging infrastructure to provide opportunity charging around town
  • Policy recommendations related to residential development and charging infrastructure

That last item is especially appropriate for Colorado Springs, a rapidly growing metropolis. Currently, Colorado Springs is the second-largest city in Colorado by population with nearly half a million residents. By 2050, the state demographer anticipates that the city will gain more than 400,000 residents, and Colorado Springs is expected to be the state’s most populated city in 15 years. Growth like that means plenty of building is underway. “We're going to have a set of recommendations with regard to parking and EV-ready spaces” at new developments, Garza said.

Preparing the Grid

Another area utilities can examine regarding EV charging access is grid infrastructure.

Colorado Springs is studying its distribution system, particularly in older neighborhoods, like the “old Colorado City” part of town. “Some of those houses were built before there were cars and garages,” Garza said.

“Generally, a transformer is sized based on the size of panels connected to it,” Ambiel noted. “If you have smaller panels, you have smaller transformers.”

Ambiel referenced a recent study that looked at distribution systems for two large investor-owned utilities: Pacific Gas & Electric and Southern California Edison. The study found that homes in lower-income neighborhoods tended to have less power capacity, which could present an additional barrier for property owners in these areas to add technology such as charging stations or heat pumps.

But, he noted, poorer and older neighborhoods aren’t the only areas that face distribution system capacity concerns. Ambiel pointed to a study the City of Palo Alto published last year after examining the city’s distribution system and potential impacts of all-electric homes. “They found that 95% of their transformers would be over-capacity. So would 20% of secondary distribution lines and 25% of feeders.”

Milad Solemani, a doctoral candidate at Texas A&M University, recently released a study examining how distributed resources such as solar and storage systems could prevent transformer overload in areas with high concentration of EVs. The study, which was funded in part through a grant from the American Public Power Association’s Demonstration of Energy and Efficiency Developments program and supported by Bryan Texas Utilities, found that using optimized battery storage systems could significantly reduce risk of transformer loss of life. The key, Solemani noted, is ensuring that customers with the systems receive real-time price signals and that battery systems are appropriately calculated to mitigate stresses that could reduce transformer life.

Not surprisingly, distribution system impacts were the very first item Garza named when asked what impediments her city was looking at to support EV adoption. Still, this city – like so many others – is moving forward with a commitment to all its citizens, no matter where they live or how old the distribution system asset happens to be. “We want to make sure the deployment of EV infrastructure and EV incentives are fair and equitable for everybody,” she said.

“Energy is a public good. It’s critical for everyone in everyday life, so no one can be left behind,” said Ambiel. “It’s fitting for power providers to lead the way because we're the ones who know the energy space. We're uniquely positioned to do that.”