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A new study out of Purdue University, and widely reported in the mainstream media (like this article in the Los Angeles Times - Electric car utility bills can shock) suggests that Californians who purchase electric vehicles or plug-in hybrid vehicles are in for a shock based on the high-cost of electricity for recharging their vehicles. The study’s authors claim that because California’s largest utilities (such as SCE) use a “tiered” rate structure, someone purchasing a plug-in hybrid could pay as much as 60% more in annual electricity costs than they would otherwise. For that to be economical, the cost of oil would have to rise to between $171 to $254 per barrel, the authors concluded.
Wow! Shocking indeed - if it were true. Fortunately, it is not.
First and foremost, most utilities, including SCE, already offer special rate structures for EV/PHEV owners that are “time-of-use” rates. Indeed, SCE has two specific time-of-use rates that are applicable to EV/PHEV charging and which can bring electric rates for vehicle charging down from the roughly thirty cents/kWh assumed by the authors to as low as eleven cents/kWh. These rate options include the ability to have a separate meter solely to monitor the energy used to recharge the vehicle. Since both the Nissan Leaf and the Chevy Volt allow the owner to program the start time for charging, it would seem to be pretty simple for these owners to take advantage of the cheapest electricity rates available. (Of course, if you are generating energy from solar during the day and recharging during the night, you would save even more!)
The Purdue authors claim to have developed a “model that would simulate energy use by Californians…. [that] closely aligned with actual energy use in California.” So how is it that they overlooked these existing rate options, to say nothing of the solar PV-EV connection?
Maybe, just maybe, the problem lies in the lead author’s true area of expertise - agricultural economics. Indeed, Professor Wallace “Wally” Tyner’s primary area of research appears to be in biofuels, particularly involving that great scam, corn-based ethanol. Here’s the description of his research from the Purdue website:
Professor Tyner’s research interests are in the area of energy, agricultural, and natural resource policy analysis and structural and sectoral adjustment in developing economies. His work in energy economics has encompassed oil, natural gas, coal, oil shale, biomass, ethanol from agricultural sources, and solar energy. Most of his recent work has focused on economic and policy analysis for biofuels.
Why is it then, that mainstream media accounts of this very “scary” report fail to mention the bias of the lead researcher?
The actual math here, even assuming worst case factors, still tilts heavily toward the adoption of EVs. Take a Nissan Leaf that has a 24kWh battery pack and claims 100 miles per charge. Ok, we are all skeptics here, so let’s assume 80 miles per charge. What is the cost per mile to drive your new Leaf? Our “skeptical” range estimate yields a range per kWh of 80 miles/24 kWh = 3.33 miles/kWh. If we assume that charging occurs in the top tier of SCE’s tiered rate structure, the cost is roughly $0.30/kWh. So, at $0.30/kWh and 3.33 miles/kWh we get $0.09/mile.
What is the cost per mile for a typical American passenger car? According to the Bureau of Transportation Statistics, in 2008 (latest data available) the average US passenger car got 22.6 mpg. If we assume an average fuel price of $3.00/gallon (don’t you wish), then the cost per mile for the average US passenger car today is $0.133/mile. If you are keeping score - the Leaf, even given a host of assumptions intended to favor the conventional car, is four cents/mile cheaper. For the average passenger car in the US that travels roughly 12,000 miles/year, that works out to an annual “fuel” savings of $511/year. Let the price of gasoline go up, or make electricity cheaper, and the savings are even greater. If charging costs $0.12/kWh and gasoline costs $3.50/gallon, the savings shoot up to $1,425/year!
But as we already noted (but the authors ignored), there are rate options available now that make electricity cheaper. And if you offset your highest time-of-use energy usage with the energy from your own solar power system - while you charge your EV with the extremely cheap energy in the off-peak time block - you get the best of both worlds!
Solar PV and EVs are a match made in heaven - despite those “shocking” stories coming from the thinly-disguised Ethanol lobby.
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