Financial viability of investments on electric vehicle charging stations in workplaces with parking lots under flat rate retail tariff schemes

Abstract

This paper assesses the financial viability of an investment on Electric Vehicle Charging Stations (EVCSs) from a commercial/industrial workplace with a parking lot, which acts as a reseller that purchases energy from the grid and then sells energy to the Electric Vehicle (EV) owners at a new flat rate tariff. Investment cost drivers (expected EVCSs costs, anticipated EV charging needs, EVCSs operational life etc.) are specified by associated market researches. Two typical capital budgeting methods applied to discounted cash flows, the internal rate of return (IRR) and the net present value (NPV) method, are used to measure the investment's profitability. Level II charging installations (3.3 kW and 7.2 kW) are examined and the case focuses on a Greek facility thus, retail-tariffs contracts of the biggest Greek electricity retailer and EV penetration scenarios for Greece are considered. Results about the investment profitability are derived, followed by remarks on strategies that can increase facility's profit. As the EVSCs market is still immature, a sensitivity analysis for various parameters is carried out to better support the economic results. The key profit determinants are identified.