SF Apartment : April 2018

FEATURE

Charging Ahead

by Stacey Reineccius

Electric vehicles have received very high marks for performance, comfort and other features. They are inexpensive to drive due to their high efficiency and very low maintenance costs, and they deliver performance equal to much more expensive cars.

This combination of low costs and high performance has created an insatiable demand among consumers. (Tesla’s Model 3 has a multi-year backlog.) Therefore, automakers have responded with dozens of new models. Plus, high-end brands like Mercedes, BMW, Volvo and others have committed to having 100 percent of their new vehicles being electric or hybrids within the next few years.

EVs make economic sense not just for drivers and auto makers, but also for property owners and the community. Gasoline and diesel are extractive products: they extract from the ground and then extract money from the community in which they are sold with little to no ability for the driver to control the cost of their fuel.

Electricity, on the other hand, can be and is generated locally and that means a big boost to the local economy. According to the federal Energy Information Agency, 81 percent of every dollar we spend on gasoline leaves the local community. The majority of that money leaves not just the state but the country. By keeping fuel (electric fuel in this case) local, we not only save money but we shift that spending to boost our local economy instead of handing it over to often-hostile foreign powers. A recent study for the governor’s office showed that by reducing gasoline/diesel consumption by 50 percent in California, we’d boost the California economy by approximately $51 billion per year with no tax increases while saving drivers money.

This boost to the local economy also means that cities and counties will see an average of $350 per year per electric vehicle in new revenues earmarked for public safety, health and infrastructure without increases in taxes. These funds come not from an increase in fees but rather the spending of fuel savings.

Regulations Support EVs

EVs have regulatory support at the state and local level, and that trend will only increase as Governor Jerry Brown recently signed an executive order that sets a target of five million zero-emission vehicles in California by 2030 and will help significantly expand vehicle charging infrastructure. The administration has also proposed new initiatives to continue the state’s clean vehicle rebates and encourage infrastructure investments that should bring 250,000 vehicle charging stations and 200 hydrogen fueling stations to California by 2025, according to the governor’s office. Certain state building codes and municipal regulations, including San Francisco’s, are now requiring new properties to have infrastructure ready for electric vehicles to capture this local value.

For San Francisco apartment owners, the latest incentives and regulations lead to several topics of consideration. For example, what’s the benefit to the owner for providing EV charging? As a property owner/manager you can gain several benefits, including adding an increasingly necessary amenity that makes your property more desirable and convenient. It can, if the right approaches are taken, increase your NOI while reducing your tenant’s net out-of-pocket expense. EV charging is a “sticky” amenity in that, so long as it remains a somewhat unique amenity, it makes your property even more attractive. Further, if your charging can be shared with nontenants, you can gain revenue from neighbors who need charging as well. Selecting the vendor with a business model designed for multifamily is a key factor in getting your best return.

Owners may also be wondering about building regulations regarding charging stations. San Francisco requires all new properties or major retrofits to existing properties to equip their parking stalls with the necessary electrical capacity and conduit runs to charge vehicles and to dedicate at least 10 percent of their roof space to either solar or green roofs.
The number of stalls must be at least one or the current California Air Resources zero-emissions vehicle sales floor, whichever is greater. This floor is increasing every model year. For 2018, the requirement is 4.5 percent, and that goes up to 7 percent next year. It is set at 22 percent by 2025 and is expected to reach 50 percent by 2030, thanks to the governor’s order. So, adding a charging station during a retrofit now may save owners from needing to add several stations down the line.

Tenants also have the legal right to install an EV charger for personal use in an assigned parking space, provided they cover the costs of the charger and electrical connection.

How to Add a Charging Station

Hopefully by now you are convinced of the benefits that charging stations bring to the community and your building. So, how do you go about adding EV charging stations?

If you have parking in your building then you need to decide if you want to own the equipment and maintain it, or if you want to contract that out. A key initial decision is whether you want to support shared access for charging (so several drivers can use the same stall) or provide a dedicated charger for each stall. Dedicated access raises the amount of electrical capacity required and may not be used if your tenant does not drive an electric vehicle. Shared equipment takes less total electrical capacity and construction work. It also holds the potential for higher revenue in less space, but it does require some additional management or technology for management.

Your decision on whether to provide private charging or shared access will likely impact your parking access. If you have an open, ungated lot, access is pretty simple. But interior garages or single-car garages require some means of access control. Be certain to determine the method you want to use. Some network operators incorporate door and access controls, while most equipment vendors leave that up to the ownership to manage. Automated access control is a must if you are going to provide a shared charger.

Then there’s the question of which type of equipment to install. There are two major categories of EV charging equipment: DC and AC. Each of these has different capacity. DC has higher amperage, so it is faster, but serves only a fraction of the vehicles being sold and should be considered only if you have a very specific need. AC charging uses a standard called J1772, which is more universal. However, it can be rated at varying amperage, from 12 to 80 amps. Today, the average vehicle charges at a little over 30 amps, but the rate of charge is increasing steadily as new vehicles with larger batteries arrive on market. Looking at the most popular cars, the Tesla Model 3 charges at 40 amps but has options for up to 80 amps. The Chevy Bolt charges at 32 amps and the Nissan Leaf 2018 is 40 amps.

Just to give you a sense of how quickly this technology is changing, two years ago, the maximum available was 30 amps. Therefore, an AC J1772 charger with as high an amperage as possible is preferred for minimal hassles over time.

These faster charges require higher electrical capacity. Apartment buildings, especially in San Francisco, tend to have an older infrastructure, meaning they have more modest electric services. This is further compounded by utility practices of undersizing wiring; in other words, the rated capacity of your building’s electric service is greater than the wire capacity the utility actually delivers. So, a careful pre-survey and datalogging of whole building usage, as well as utilizing an EV- and utility-knowledgeable contractor is a must. In San Francisco, after surveying dozens of buildings, we have found that typically 45 to 50 percent of the main breaker capacity is typically available without upgrade, but this gets diminished if other systems upgrades and retrofits are planned.

Equipment costs range from $1,500 to $10,000 per charger, depending on its capabilities, but this does not include an electrical capacity survey or upgrades, which often have to be custom quoted. Some networks, such as Powertree Services (electrictrees.com), will offer to cover the costs and labor, and provide the service and a minimum monthly payment guarantee to the owner. Others, such as Chargepoint (chargepoint.com), will sell equipment without a performance guarantee and then charge a monthly fee for participating in the network. Tesla offers a proprietary charger but does not cover the electrical costs or allow for non-Tesla vehicles to charge.

If you have a large parking facility with an open lot, PG&E also offers to install 10 chargers and a new dedicated electric service. But that deal requires a long-term easement and mandates that the 10 stalls be dedicated to EV only. In all cases, a local internet connection and long-term agreement will be required by any network.

Luckily, several potential subsidies exist. First, drivers get a $7,500 federal tax credit and an up to $2,500 cash incentive from the state to purchase a zero-emission plug-in vehicle. PG&E also offers drivers who have a meter in their name a $500 one-time rebate. Second, the Bay Area Air Quality Management District offers up to $6,000 in rebates if you install solar and EV charging and make them shared access. Third, the federal Alternative Fuel Infrastructure Credit may or may not be available. It was recently retroactively enabled for 2017 and might be again, but is currently unavailable. Finally, the 100 percent depreciation in the new tax bill is generally applicable.

Demand for plug-in electric and hybrid vehicles is growing thanks to a natural market pull for a superior and more cost-effective product, and boosted further by state and local policies. As most people want to charge at or near their home, there is a multibillion-dollar opportunity for multifamily property owners to supply or participate in supplying that electric fuel.

Stacey Reineccius is the founder and CEO of Powertree Services, Inc. He is a veteran, attended UC Berkeley, holds six patents in EV charging and energy storage, and is also the founder of two energy storage companies. He has been a San Francisco resident since 1963.