The growing popularity of electric vehicles means that drivers need more places to charge them. This presents an enticing opportunity for businesses of all sizes while government agencies work to expand the nation’s charging infrastructure. Could installing EV charging stations in your parking lot benefit your small business?
Installing car chargers can attract new customers, improve your business’ reputation, and bring in additional income. Here’s a closer look at the benefits and related costs and how they may influence your decision.
Potential Business Benefits of EV Charging Stations
Electric car drivers represent a ready and attractive market for the right business. Studies suggest that 85% of EV owners have annual incomes of $100,000 or more, which suggests they may have more disposable income than your average customer. Installing EV chargers can entice them to stop by your business.
Since charging takes a while, these customers may spend more time in your store. National retailer RetailCo experienced this firsthand, seeing the time customers spent at its stores increase by 50 minutes on average after installing EV chargers. For transaction-based businesses, this increases the chances that customers will make a purchase; for service-based businesses, it offers more face-to-face time with customers to create ongoing business opportunities.
Customers who see EV chargers in your lot may get a positive impression of your business. Even if they don’t drive an EV, the presence of charging stations communicates that you care about the environment, and 85% of consumers have shifted buying preferences to be more sustainable. The same study found that more than one-third are willing to spend more for sustainability, which could lead to higher sales or customers preferring your services over less eco-conscious competitors.
These chargers could also help you attract top talent, as 74% of EV owners express a strong interest in workplace charging. And as your business joins others making the transition to electric service vehicles, you could also use these chargers for your company vehicles.
Costs of Installing EV Charging Stations
Of course, EV charging stations also have their fair share of expenses. Small-business owners need to consider these to determine if it’s a reasonable investment.
Charger costs vary by type and manufacturer, but you can generally expect to pay around $6,000 per charging port. Repainting parking spots, adding signage with custom branding, and purchasing related software will also raise upfront expenses. Adding just a few chargers will be a significant investment.
You can also expect higher energy bills after installing new charging stations. After RetailCo installed EV charging stations, the company’s electrical bills increased by roughly $50 per month. Charging an EV costs between $30 and $60 per vehicle per month in energy bills, depending on local power costs and how frequently people use the chargers.
How to Reduce the Cost of a Charging Station
While the expense of installing charging stations and higher electric bills may be beyond the budget of some small businesses, there are ways to reduce the costs. Unfortunately, the federal tax credit for EV charging stations expired in 2021 but several states still offer incentives to businesses. New York, for example, offers an income tax credit of up to $5,000 for installing public EV chargers. Additionally, some public utilities offer incentives to help cover the costs of installing the chargers. For example, Southern California Edison’s Charge Ready program offers businesses rebates for purchasing and installing EV charging stations.
While offering customers free EV charging is desirable, it is unlikely to be feasible for many small businesses. One way to help cover the higher energy bills is to require customers to pay for using the charger. Another option is to use solar panels to generate electricity for the charging stations. While solar panels will pay for themselves over time, they also have high upfront costs. Solar financing strategies can help reduce those costs but installing solar panels is not a viable solution for every small business.
Before You Install Your Charging Stations
Be sure to review charging availability in your area to see if you could gain a reasonable amount of business. Some states have tens of thousands of chargers, while some have mere dozens. If your business will be one of the only places in the area offering charging, you could see more visitors because of it.
If possible, partner with an EV charging company with a wide customer network so they can direct their users to your store, bringing in new business faster. Remember to promote the charging stations and post clear signage to communicate the new service to customers, too.
EV Charging Stations Can Be a Promising Business Opportunity
Installing EV charging stations is expensive but the right business could experience benefits like increased customer dwell time, new customers, and an eco-conscious company image, all potentially generating higher revenues. Costs and benefits can vary, as some markets will respond more positively to sustainable choices and the available incentives differ between states. Small-business owners should review local prices and incentives, EV ownership rates, and existing charging infrastructure to determine if it’s a worthwhile investment.
As with any investment, it’s best to start small and grow from there. Begin by installing two to four chargers, then add more if you see enough demand. Compare EV charger companies and ask for estimates before choosing one. Consider potential partners’ customer service and additional features in these decisions.
Also, compare pricing models. Free stations appeal more to customers, but fee-based charging will help offset some of the costs of installation and electricity. Consequently, businesses with higher budgets may favor the free model, while smaller companies may need to start with a fee-based model and consider going free later if the increased business covers the charging expenses.
Installing EV charging stations may be a worthwhile investment for businesses with large enough budgets in areas with quickly growing EV ownership rates. Small businesses in locations that don’t have a lot of EVs may want to wait before investing in charging stations.
Feature image: Evgenia Parajanian – stock.adobe.com
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