EV Charging Infrastructure – Business Models for Commercial Landowners

Looking to install EV charging infrastructure? Read our breakdown of the different funding options available to commercial landowners.

460,000 electric vehicle (EV) drivers up and down the country are looking for places to charge their car. With the 2030 ban on petrol and diesel vehicles growing ever larger on the horizon, demand for public EV charging is only going up. The latest figures estimate UK EV uptake will hit 6.5m by 2030.

Landlords are experiencing increasing demand for public electric vehicle charge points (EVCPs) at their sites, and the revolution is only getting started.

This blog aims to explain the funding options available to commercial landowners assessing EV charging infrastructure options for their retail sites. There are typically three options to choose from:

Fully Funded (100% funded by Mer)
Partially Funded (Hybrid)
Landowner Funded

Fully Funded EV Charging

Under a fully funded EV charging infrastructure model, Mer, would fund the entire capital outlay, typically encompassing hardware and installation costs, as well as costs associated with the connection to the grid (or district network operator (DNO)). Depending on the configuration we recommend at your site, these can be as high as £400,000 for just the hardware at a large site, and more to upgrade your sites’ on-site electricity supply through connections to the grid.

In this scenario, Mer would normally look to agree a long-term agreement and offer a tailored commercial revenue model to the landlord depending on the scale and type of site or portfolio. These models can either be a percentage profit share model derived from operation of the chargers, a base rent only model (where an annual fee is paid to the landlord for each car charging space leased), or a higher-of model; where both a bay-rent and a profit share is agreed, and Mer pays whichever annual amount is higher to the landlord.

Mer will operate and undertake all maintenance, repairs, and upgrades for the duration of the agreement period.

Partially Funded / Hybrid EV Charging

Under this model, capital costs are shared between the landlord and Mer, at an agreed split of the costs – with the revenue sharing altered to reflect the landlord’s contribution. Again, Mer will undertake all operation and maintenance activities for the duration of the agreement period.

Landowner Funded EV Charging

Under this model, Mer would provide the landowner with a quote for the installation, hardware and connection costs. Once the charge points are installed, the landlord would keep 100% of the profits from the charge points and pay Mer a fee for the maintenance and monthly back-office costs associated with the ongoing operation of the charge points.

Sustainability

Sustainability for both your business and the environment is central to the conversation around EV charging. The EV charging industry is currently hyper-competitive, with offers to landlords being driven up by short-term players looking to install, scale and sell their infrastructure to the highest bidder, with little consideration for long-term charge point maintenance or relationship building with their landowner partner.

A change in operator mid-contract due to an operator buy-out can lead to a handful of issues, such as a relationship breakdown between the new operator and landlord, as well as unsatisfied customers and reputational damage if the charge points are poorly maintained.

Furthermore, ‘over-installing’ on sites can cause local grid constraints and lead to a high proportion of unused assets – which has an uneconomical and excessive environmental impact. Charger installations should be rolled out in line with increase in demand and EV uptake, allowing for an efficient and sustainable charging solution. A futureproofed charging installation can ensure that EV bays can be easily added as demand increases, reducing site works and disruption to a minimum.

A charging solution uniquely tailored to each site and complementing the existing typical customer dwell time will lead to more satisfied customers, stable additional revenue, potentially lower grid constraints, and, most importantly from a commercial landowner perspective, an increase in footfall – as EV drivers use the on-site facilities while their car charges.