The Cost-Effectiveness of Charging Electric Vehicles at Home vs Using Gas

Is it more cost-effective to charge an electric vehicle (EV) at home compared to using gas? This question has gained popularity as the transition to electric vehicles continues to gain momentum. In this article, we will explore the comparison between the costs of charging an EV at home versus the cost of using gas, including factors such as EV rates, power recovery, and demand charges.

Comparing Home Charging and Gas Prices

For instance, let’s consider the scenario of a homeowner who has an Ioniq 5 with a range of 400km and an old Accord that gets around 1.8 liters per kilometer (L/100km). The cost to fill the Ioniq 5 with the necessary amount of electricity to travel 400km is approximately $5, while the cost to fuel the Accord for the same distance is around $80, based on an assumption of 1.8 L/100km. When translating this into cost per kilometer, the Ioniq 5 costs approximately $0.014/km, while the Accord costs around $0.018/km.

The Role of Power Recovery in EVs

Another significant factor in the cost-effectiveness of EV charging is the concept of power recovery. Unlike traditional vehicles, which waste energy through friction and heat during deceleration, EVs can recover a portion of this energy and store it in the battery. This means that EVs not only save on energy costs but also help to extend the range of the vehicle. This inherent feature of EVs makes them particularly cost-effective in the long run.

Electric Rates and Time-of-Use Plans

Electric rates can vary significantly by time and region. For instance, in Portland, Oregon, a homeowner can sign up for a time-of-use (TOU) rate plan, where the cost per kilowatt-hours (kWh) varies depending on the time of day and day of the week. Before the new plan, the cost was a flat rate of $0.16 per kWh, 24 hours a day. However, the new TOU plan offers different rates: $0.16 per kWh from 7 am to 5 pm on weekdays, $0.35 per kWh from 5 pm to 9 pm on weekdays, and $0.08 per kWh from 9 pm to 7 am, and the same rate on weekends.

Filling Up an Electric Vehicle with Lower Rates

Using the TOU plan, to fill a Tesla with 10 kWh after driving 40 miles (64 km) would cost around $0.80. If the normal rate was $0.16 per kWh, the cost would be $1.60. And if the rate was $0.20 per kWh, it would be even higher, at $2.00. This demonstrates how flexible pricing can indeed make an EV more cost-effective, especially during off-peak hours.

Public Charging and Demand Charges

Public charging stations, on the other hand, often have higher rates due to additional demand charges that the suppliers must pay. Depending on the region and the supplier, public charging stations can charge between $0.45 to $0.65 per kWh. In some cases, like in California, public chargers can charge up to $0.75 per kWh because of the high demand charges. Demand charges refer to the extra cost a power company charges for the peak demand during a specific period. For example, if a building reaches a peak demand of 150 kW during any 1-minute period in a month, the supplier might bill $450 for electricity plus a demand charge of $13 per kW used during the peak period, adding up to $1,950 in total.

Strategies to Reduce Demand Charges

Businesses that are charged for demand charges can significantly reduce their costs through strategic management. For instance, scheduling early departure times to avoid peak hours can save a considerable amount. In addition to encouraging early departures, businesses can also reduce the amount of electricity used during peak hours by turning off lights, air conditioning, and other large consumer electronics. Installing LED outdoor lighting and reducing the number of hours it operates can also contribute to lower demand charges. It is crucial to consult with the electric company to understand the demand charge and find ways to minimize it.

Conclusion

Based on the calculations and factors mentioned, it is evident that charging an electric vehicle at home can be more cost-effective than using gas. The difference can be as high as a factor of three, depending on the region and the time of day. While public charging stations may have higher rates, they can be strategically used during off-peak hours to maintain cost-effectiveness. Understanding and managing demand charges can further enhance the cost-effectiveness of charging an electric vehicle. With the right strategies, the transition to electric vehicles can offer significant financial benefits.