What Financing Could Mean for Public Electric Car Charging

By · October 21, 2013

Detail of ChargePoint's CT4000 series charging station.

ChargePoint last week announced a financing program that allows companies and municipalities to install EV chargers with no upfront cost. It’s called the Net+ Purchase Plan. The idea is to overcome the reluctance of property owners to invest in electric car charging by removing a big cash outlay, and promising a quick positive cash flow.

The new offer is a partnership between ChargePoint and Key Equipment Finance, an affiliate of KeyCorp. The lease-to-own program for charging stations covers purchase cost of the station, installation cost, operational services, and warranty. It tries to follow the success of the solar industry, which saw rapid growth after offering private and commercial customers the ability to install solar panels with little or no money down.

Speaking at the recent VERGE SF conference, Richard Lowenthal, chief technical officer at ChargePoint, said the financing plan essentially moves the responsibility of paying for the infrastructure from the government to drivers. In other words, drivers of gas-powered cars pay for refueling infrastructure through the profits generated at the pump (and via sales of snacks). Similarly, the ChargePoint financing plan, it is hoped, will produce profits that pay for the growth of charging stations. However, unlike drivers of gas cars who are entirely dependent on gas pumps for energy, EV drivers nine times out of ten recharge their cars at home at prices that are much cheaper than most public charging.

Nonetheless, many electric car advocates—especially those trying to build a business out of public charging—believe that ubiquitous public chargers are the key to increasing adoption of EVs. “The magic of the Net+ Purchase program is that with very little capital, the electric vehicle industry will see rapid adoption,” said Reed Hundt, CEO of the Coalition for Green Capital and former FCC Chairman in the Clinton Administration. “This is absolutely critical for expansion of the EV market.”

The most obvious benefit to EV adoption offered by a financing plan is to encourage employers to install charging at the workplace. “Through this program, companies and municipalities can now offer their workforce EV charging for no more than the price of a couple of cups of coffee per day,” said Pat Romano, CEO of ChargePoint, in a company press release. He equated the introduction of workplace charging to giving employees a five percent raise.

Financed Versus Free

The ChargePoint announcement follows an introduction earlier this month from Fuji Electric Corp. of America, which is offering a zero-down, zero-interest program for its DC Quick Chargers. Larry Butkovich, general manager for EV systems at Fuji Electric, said, “Drivers need reassurance that they will be able to access charging stations while on the road, and our Financing Program gives businesses the assistance they need to make a business case for the installation of these Quick Charging Stations.”

The financing plan, offered in partnership with Union Bank and Marlin Leasing Corp., covers the cost of Fuji Electric’s UL-Certified 25kW DC Quick Charging Station. ChargePoint’s plan covers not only equipment, but installation and service—although ChargePoint only sells Level 2 240-volt charging equipment.

Arguably, car companies that make EVs have the biggest incentive to promote widespread charging. That’s why, in specific regions where EVs are popular—such as Oregon—Nissan goes beyond financing to offer up to $15,000 to for DC Quick Chargers via the company’s EV Advantage program. The Federal Alternative Fuel Infrastructure tax credit also covers about 30 percent of the installation costs of quick-charging stations up to $30,000. (The cost to install DC Quick Charging is commonly around $40,000, whereas Level 2 charging can be significantly less.)

One lesson from the recent bankruptcy of Ecotality, operator of the Blink Network, is that it’s difficult for charging service companies to make a transition from government-sponsorship to independent financially sustainability. The advent of traditional financing models could help provide the means to wean charging services off of government support.

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