With energy prices rising, many workplaces are looking to introduce tariffs for using their EV charge points. Scott Duncan, Associate Consultant at Mer, explains how to do it.
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As energy prices have risen, we have seen a growing trend of clients coming back to us to discuss introducing tariffs for using their Mer charging points in the workplace.
Scott Duncan, Associate Consultant at Mer, says: “We are seeing more workplaces move away from giving employees free EV charging at work, simply because electricity prices are getting higher at a time when a company’s other overheads are also growing.
“There is a realisation that free charging is an extra perk for some employees. This is great if you are trying to encourage workers to switch to EVs. But equally, you wouldn’t give free petrol or diesel to workers driving legacy cars, so you might not want to give EV drivers free ‘fuel’, either.”
Scott believes that the starting point has to be understanding your corporate objectives. “Companies are increasingly buying EVs as company vehicles or offering salary sacrifice schemes to incentivise take-up of electric vehicles (EVs), he says. “Additional charging infrastructure goes hand in hand with this. If one of your business goals is to incentivise adoption of EVs by employees, then charging for EV charging at work might actually be counterproductive.
“However, we are seeing a move away from free to subsidised charging in the workplace, as companies are looking to speed up their return on investment (ROI) from charging infrastructure. For AC fast charging, which is the most common solution for workplaces, it can be a considerable number of years before you realise that ROI. So, it certainly is not a money-maker, but it could help to cover ongoing back office software and service and maintenance costs.
“Around 40 per cent of us live in properties that are unsuitable for off-street charging, and the Government recently removed the home charging grant. On that basis, there will always be some employees happy to pay to charge at work, providing you apply a fair tariff.”
Once you decide to introduce a tariff for charging, the first step is understanding your baseline costs. This will be the price per kilowatt as laid out in your electricity tariff, plus the transaction fees applied by your charging network operator.
“Electricity tariffs can vary significantly,” says Scott. “If you are tied into an expensive tariff, it is unlikely that you will be able to benefit from setting an EV charging rate that includes a profit margin. There are often other charging options available to users so if you set your tariffs too high then they will simply be disincentivised to use your chargers unless they have no other alternative.”
When setting a charging tariff, think about whether you want to make a profit or simply mitigate rising energy costs by providing a subsidised rate. “For most workplaces, employees will live within commutable distance so perhaps only travel up to 10 miles into work. Many of them might well have a charge point at home, so the price of workplace charging is unlikely to be able to compete with the cost of home charging, unless it is subsidised.”
Mer provides the capability to set multiple tariffs for different use cases. For example, large sites such as hospitals might have a subsidised tariff for staff, a higher tariff for visitors, and a zero tariff for pool cars and company vans. Or a business park might have a subsidised tariff for tenants but charge a different rate for visitors or maybe even to residents nearby who want to use the infrastructure overnight when it would otherwise be dormant.
“We can set a public tariff so that anyone with the Mer Connect app can pay to use that charge point,” says Scott.
“The same charge point can also have a private, subsidised rate for employees, and a zero tariff for the organisation’s commercial vehicles which the driver activates via an RFID fob.”
Given that most employees will not travel far to work, it is highly unlikely that an EV driver will need to need to be plugged into a charge point all day, every day.
“However, some people forget or simply do not want to go outside and move their car. Sometimes EV charging points are located in preferential spaces such as near building entrances, so people are reluctant to move them. This can impact utilisation rates.
“One of the key pieces of advice we always give to our customers is to set some guidelines – or charging etiquette – for the workplace to encourage people to move their cars once charged. Setting up a internal booking system is one way to keep control.”
To support this, future development of Mer Connect will see charge point owners being able to introduce an overstay charge. This will incentivise EV drivers not to monopolise the infrastructure, freeing up this resource for others to able to use it. The ability to optimise their chargers important for those looking to achieve a return on their investment.
Whether you are thinking about installing Mer workplace charge points or have already got some, we can help you decide whether tariffs are the right way to go. Get in touch with an expert like Scott by contacting us on [email protected].
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