How Much Can You Save With Off-Peak Charging?

July 21, 2016

Electric vehicles use a lot of electricity. An all-electric Nissan LEAF requires nearly 3,242 kilowatt-hours of juice to cover the 11,346 miles Americans average in their cars annually. That amounts to a 30 percent increase in an average household’s electricity consumption.

Seattle, which benefits from blending cheap, hydroelectric energy into the grid, has a lower cost of electricity than most West Coast cities. Still, adding an electric vehicle would cost an additional $420.43 per year to the average Seattle household at current energy prices. That’s far less than the more than $1,900 a 28-MPG gas vehicle would require covering the same miles, but believe it or not, there’s still room for further savings.

Seattle City Light is one of a dwindling number of utilities servicing major U.S. metropolitan areas that don’t yet offer discounted electric rates during hours of low demand. Utilities all over the country have adopted Time of Use (TOU) plans to encourage shifting energy use away from prime hours, which span from roughly mid-afternoon to late evening.

Utilities typically lose money the less balanced demand is from hour to hour. Because electric cars tend to charge overnight, when demand is at its lowest, most utilities have a strong incentive to promote EV adoption—particularly for cars that charge during the early morning hours.

Time of Use Plans Vary

Different climates, seasons and energy generation sources contribute to create a disparate patchwork of TOU schemes throughout the country. (We compared a number of TOU rate plans recently.) In some places, energy is virtually free overnight. In others, savings from overnight charging may not exceed a few cents per kilowatt-hour.

So where does TOU pricing benefit plug-in charging the most?

We looked at rates in the top six cities for plug-in vehicle adoption, according to a 2015 International Council on Clean Transportation whitepaper. San Francisco, Atlanta, Los Angeles, San Diego, Seattle and Portland were the top six cities for plug-in vehicle sales in 2014, and among them, only Seattle didn’t offer a TOU rate. (Most of the others went so far as to offer one specifically catering to EVs.)

We calculated the costs of charging exclusively during peak and off-peak hours under these plans to figure out just how much off-peak TOU charging can be worth to the average household.

Between the top five cities with available TOU rates, savings varied from just $116 per year to $237 per year depending upon the utility. In each case, we used current utility rates, average vehicle mileage, and the energy efficiency numbers for the Nissan LEAF to create a baseline to better understand how TOU savings vary from market to market.

As you can see, the variance between different TOU plans may be significant from a statistical standpoint, but it might not be all that noticeable on a monthly bill since costs are so low to begin with.

More noticeable is the difference in cost between Seattle and every other city we looked at. Despite Seattle’s relatively low, base per-kWh energy prices, the fact that it doesn’t offer any special programs for electric vehicles is costly to owners. Charging at home in Seattle is likely to push your household into the next cost tier (based on added demand), which makes owning an EV there relatively expensive compared to other cities.

TOU Savings Are Much More Significant for Fleets

Residential off-peak TOU charging can save your family a few hundred dollars a year compared to a standard tiered rate plan or frequent on-peak charging. But for fleets operating several or even dozens of plug-in vehicles, TOU charging under commercial rates can make the difference between seeing cost savings from EV adoption and not breaking even.

To illustrate this, we estimated the cost to charge a typical taxi logging 70,000 miles per year, in San Francisco. Under a standard Pacific Gas & Electric’s commercial TOU plan, the average per-kWh difference between peak and off-peak charging was just 3.6 cents—far less than the difference in most residential plans. Still, over the course of a year, charging exclusively during peak hours would cost the average driver more than $720 per year.

Spread over a fleet, the cost of failing to optimize charging schedules adds up.