• Electric Vehicles
  • Digital Utility Strategies
  • Commercial Electric Vehicles

Digital Platforms Can Increase Electricity Cost Transparency

Raquel Soat
Aug 13, 2020

Guidehouse Insights

The next wave of electrification in the transportation sector is the commercial fleet. Pressured by corporate and societal interests in decarbonization, fleets are increasingly looking to electrify. Commercial EVs are appealing for fleets because of the lower total cost of ownership, though these vehicles have a higher upfront purchase price. However, with purchase incentives, charging optimization to ensure lower electricity rates, and lower maintenance costs, the total cost of ownership of these vehicles is often less than traditional diesel or gasoline vehicles. The trend toward electrification is encouraging for the market, but there are challenges—one of the most prominent being cost transparency.

Understanding the Cost Transparency Issue

First, onsite grid connection upgrades may be required for fleet depots installing high powered DC fast charging (DCFC) stations. These DCFC stations could require capacity upgrades at the fleet depot site to accommodate +150 kW per charging station, though the exact charging capacity is dependent upon fleet use case. High upfront costs are associated with outfitting a depot with grid connection upgrades that fleet operators may not anticipate when initially making the commitment to electrify—not to mention the cumbersome nature of working with several utilities for fleets with depots in multiple service territories.

The second cost transparency issue surrounds electricity pricing. Fleet operators will need clarity on how their future charging patterns for EVs will impact monthly utility bills under existing rate structures. The electricity rates must be determined by understanding the facility load profile and how demand charge structures penalize additions to peak loads. However, this understanding often requires complicated calculations leveraging multiple inputs to which fleet operators often have varied and limited degrees of access.

Utilities Can Apply Innovative Strategies to Help

Utilities can help fleet operators increase cost transparency associated with fleet electrification by deploying digital platforms that dynamically calculate grid connection costs by location and monthly electricity bills under varied load profiles. An example of this novel approach could include the following:

  • Grid connection upgrade costs per site based on capacity currently associated with the address
  • Forecasts of monthly utility bills based on charging times and amounts with fleet operator toggling abilities
  • Historical electricity consumption by site

By developing a platform that includes these pieces of data, a utility could offer on-demand load profile modeling for fleet sites and all-in cost forecasts for upgrades and electricity. Utilities could partner with existing software providers that manage charging rates to enable businesses to manage their charging and minimize cost overages. Providing cost data to fleet operators that can be accessed and toggled at any time will allow fleets to make the most informed decisions possible and reap the cost savings of electrification.

As large companies like Amazon and UPS begin to electrify their fleet vehicles, the need for a cost transparency digital platform will be necessary to optimize not only site modifications but also monthly electricity costs. Utilities can lead the way in providing this crucial data, encouraging more commercial fleets to electrify.