Friday, April 16, 2010

EV Ownership Costs For Electricity

Let's be honest. There are many good reasons to own an EV -- smooth, quiet, non-polluting, non-climate-changing, non-foreign-power supporting, non-foreign-trade-deficit producing -- but unless you generate your own electricity, cost savings is not the prime factor. Still, if you can generate your own electricity, it could at least become a factor.

For a fair comparison, an ideal equivalent ICE car would be a Prius for purposes of initial cost, size, and performance. A Prius gets 50mpg, and its ICE maintenance cost can be estimated at 1 cent per mile, so for $3.00/gallon gasoline the total cost is 7 cents per mile. A Prius-comparable EV would get 3 miles to the KWH, and its battery pack loses value at an estimated 2 cent per mile (making an assumption that there will be strides in lowering battery cost in the future), so for 15 cents a KWH of electricity the total cost is 7 cents per mile. Therefore, the actual cost to operate either vehicle is the same.

If you live in a sunny state and put up a 3KW solar system, and you drive around 50 miles a day, then you are covering your EV electricity needs. If you're careful and your state has a good rebate program, your net cost for the system may be around $10,000. Assuming the annual value of your $10,000 capital is 5% ($500), and assuming you drive the national average of 15,000 miles per year (50 miles per day for 300 days), then the cost of your electricity is around 3 cents per mile. This is better than 5 cents per mile when buying the electricity at 15 cents a KWH. And, perhaps very importantly, you've locked in the cost of your electricity at 3 cents per mile for many years to come: I think we will all agree that the cost of utility electricity will only be going up.

This scenario is only regarding getting your electricity at home: it is as yet unclear what the cost of public charging electricity will be. Right now, and perhaps well into the future, there are opportunities to plug in for free. On the other hand, there are a number of players in the charging space and each seems to be offering different ideas of how to get customers to pay for public charging: either by buying a set amount of electricity up front; subscribing to a service; paying as you go; or some combination. However, it is clear that all these plans will cost more than charging at home assuming that you do not have to pay an outrageous amount for your home electricity.

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