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To charge or not to charge?

Evaluating an EV charging station investment.
Electric Vehicle Charging Station Stock Image

Installing an electric vehicle (EV) charging station in a retail or commercial location is no small matter. There’s an entire range of considerations at play and fair amount of complexity to the charging landscape. This article provides a brief overview of the key aspects to consider and some secondary sources to consult for further guidance.

The first step is to conduct a site analysis to determine the feasibility of installing one or more chargers. One of the leading Canadian EV charging networks, FLO, has extremely useful guidance on its website for prospective customers. Included in this guidance is something called the “ideal ratio” of chargers to potential EV drivers likely to visit your location.

The ideal ratio is calculated according to the following formula: attachment rate multiplied by the number of available parking spaces for EVs multiplied by the penetration of EVs in your area. Attachment rate is equal to the number of charging ports per 1000 EVs; EV penetration is calculated according to the number of EVs registered divided by the total number of vehicles registered in the same year.

According to the Business Development Bank of Canada (BDC), the three most common options for installing an EV charging station are as follows. First: Buy the charger outright and operate it independently, selecting either a non-networked model or one that uses third-party software. Second: Create your own network of chargers. Third: Ask an existing network to install their chargers at your location. In this case, the network owns and operates the equipment and pays a leasing fee back to you for using your location.

Once you’ve determined the ideal ratio, then it’s on to think about the physical space where your charging station will be located. At the top of the list is to identify existing sources of power and assess whether additional conduits are required. Positioning EV chargers close to existing buildings can short circuit the need for additional installation costs and satisfy another requirement: ensuring customers are recharging vehicles in safe and well-lit areas of the property. 

To gain some sense of what goes into installing an EV charging station, your budget should include a fair number of line items. Among these: permits and inspection costs, the EV charging equipment itself, pavement demolition and repair, signage and paint, equipment rentals and labour costs.

Without question, there will be more EVs on the road in five years than there are today, so time should also be spent on mapping out potential expansion plans. If scalability is important to your location, another key decision is on whether to network your charging station(s). With a networked station, energy consumption and charger performance can be analyzed remotely, and chargers can be upgraded over-the-air. 

With the benefit of data on station performance, operators can take advantage of smart power sharing among chargers and determine if more stations are required down the line. A networked station can also allow for payment processing, another key determination in estimating the return on investment.

Even when it comes to a payment plan for recharging, there are different ways to go. Some owners may choose to set ultra-competitive rates in order to bring more customers into the location, a reasonable plan if you’re looking to put your stations on the map. Some owners may also look at tiered pricing for less busy times or even free charging at the start, while others could adopt a “surge pricing” model that charges more during high-traffic times of the day.

After all of these considerations, it’s then time to consult municipal, provincial and national guidelines. Governments in Canada have a vested interest in promoting electrification and in seeing more EV chargers installed across the country. As such, the governments have developed standards for new charging stations that represent required reading. 

In addition, there are various incentive programs for businesses that run from time to time. As of this writing, the province of Ontario has the ChargeON program, which provides subsidies for businesses installing chargers in communities with fewer than 170,000 people. Natural Resources Canada also offers subsidies for public and private sector businesses that are planning to install charging stations. Both of these programs are competitive in nature; they require applications by a set deadline, so it’s best to understand the criteria in advance. 

As we all know, the EV landscape is changing at a furious pace. The ROI of an EV charging station now will not be the same five years from now; it may not be the same by the time you read this story. That’s why it’s important to crunch the numbers and figure out when the time is right for your business to jump on the bandwagon. 

This commentary piece first appeared in the Convenience Store News Canada + OCTANE Magazine January-February 2024 issue.

Mark Hacking is an award-winning editor/writer with an affinity for all things automotive. He contributes to leading publications in Canada, Australia, Switzerland and the U.S.

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