A business model for SPCS describes the rationale associated with providing value in social, economic, and environmental contexts [65
]. For commercial companies, a business model is a plan to generate revenue and make a profit from operations [65
]. For SPCS, the social value of conveniently located SPCS, the environmental value of green solar energy, and the economic aspects are important parts of the business model to be addressed [65
]. The payback period, the length of time required for the income associated with an investment to equal the capital invested, is often used to evaluate alternatives.
6.1. University Non-Profit Organization Model Parameters
Parking services at large non-profit organizations, such as universities, are often self-supported. The income acquired from the parking permits and citations is used to develop and maintain the university parking lots. The majority of university students, faculty, and staff park in open parking lot spaces, as the survey shows, in order to save money and park in more convenient locations. Installing solar powered charging stations in these lots can provide some of the benefits a parking garage provides, such as shade and protection from weather, but at a more convenient location and comparable price to parking garages. Although the amount of electric vehicle ownership at universities is still relatively low overall, the survey indicates that there is a growing interest in owning an electric vehicle and support for the installation of SPCS. The purchases of electric vehicles are expected to increase with the greater availability of electric car charging stations [5
SPCS have been estimated to be about $11,865–$18,600 each. SPCS seem to be relatively expensive, but there are values associated with these stations in addition to power generation and charging such as shade, protection from rain, ice, and snow, the improved image of the university, and reduced carbon dioxide emissions that make the price seem more reasonable [21
]. Student, staff, and faculty do not need to own an electric car to use the shade and shelter of the SPCS. When considering the value of these benefits, the charging stations have the potential to be successful.
When considering methods to finance SPCS, there are multiple options; one popular option many installers use is tax incentives. In order to qualify for certain renewable energy credits or tax incentives, the university may need to form partnerships with other companies [5
]. Federal tax incentives include the Solar Investment Tax Credit, which provides a 30% tax credit for solar systems, valid through 2016 [33
]; the Renewable Energy Property Tax Exemption, which exempts renewable energy equipment from property taxes [60
]; the Electric Vehicle (EV) Infrastructure tax credit, which is a 30% credit of the charge station cost with a max of $1000 for consumers and $30,000 for businesses [34
]; and Business Energy Investment Tax Credit (ITC) which equals 30% of expenditures [34
]. The Database of State Incentives for Renewables and Efficiency is a helpful database that lists incentives for all US states, and should be further perused for updated tax incentives [35
A partnership with an electric charging station company may also be a viable option for financing SPCS for a non-profit organization. For example, ChargePoint, an electric charging station company, donated a charging station to K-State, which charges an hourly rate for use of the station. The company benefits from receiving 10% of the monthly revenue generated from use of the station and from customers subscribing to the ChargePoint infrastructure [36
]. On the other hand, K-State benefits from receiving the charging station for free and 90% of the income generated from station use, while improving their image. A similar scenario could be followed at other universities.
Another possible finance option is a partnership with a business. In this case, the business purchases the SPCS and pays for the installation, but in return receives free advertising on the campus charge station for a certain number of years. Spending about $11,865–18,600 per station in return for multiple years of free advertising on a college campus can be an attractive deal for businesses. This partnership allows the university to spend no money on the charge stations, but still improve their image, generate revenue from station use, and reduce their electricity bill with generated solar power. In addition, it allows businesses to reach a large advertising audience for multiple years. The university could request Tesla Motors, Nissan, or Chevrolet to donate a SPCS for example and in exchange the car company would receive free advertising. Partnerships with businesses or electric charging station companies (or both) are win-win situations.
Most universities sell annual parking permits for students, faculty, and staff to park on campus. University permit parking prices vary depending on classification as student, staff, or faculty and the location of the parking for faculty and staff. For example, K-State students pay $170 for an open parking lot spot while K-State faculty and staff pay $150–$190 for an open parking lot spot, $410 for a preferred garage spot, and $610 for a reserved garage spot [37
]. The addition of solar powered charging stations on campus will alter the pricing structure for university parking. Based on survey results, the best pricing structure is staggered pricing where it is least expensive to park in open lots without using the SPCS, slightly more expensive to park under the SPCS to simply use the shade and shelter, and most expensive to park under the SPCS to charge an electric vehicle. The average amount survey participants chose to pay to park in the shade in addition
to their existing parking permit price was $25. Therefore, for the new pricing structure the shaded parking spot prices would be $25 more expensive than the average spots, and the parking permit prices for using the charging station would be about $300 more expensive. The additional $300 is actually a reasonable pricing amount because it includes not only shade and shelter (amenities which parking garages provide), but also allows unlimited charging for electric cars. When comparing the new permit price to the K-State case, it is evident the SPCS charging permit is actually between the $410 and $610 K-State garage permit prices. Thus, the additional $300 for unlimited annual charging appears to be a reasonable price that provides several benefits and is comparable to current university permit prices.
As already mentioned, the estimated payback period for SPCS is slightly below or equivalent to the typical 25-year warranty for solar panels [38
]. It is important to remember that the payback period would decrease with the addition of tax incentives, partnerships, and user parking permits, which 55% of respondents were in favor of. Also, the payback period could decrease further if the university or non-profit entity slightly increases the permit prices annually.
Besides price and payback period, another logistical aspect to consider regarding SPCS is location. According to the survey results, the majority of respondents prefer SPCS to be placed in parking lots that are typically located far from main campus buildings but have an abundant amount of parking spaces. Most respondents seemed to value available parking spots higher than conveniently located parking. Respondents who own or would like to own an electric car preferred locations for SPCS in large lots with many available spots or in multiple locations. The future plans for the university should also be considered when planning locations for SPCS. For example in the K-State case, the University has a 2025 Master Plan that plans to move surface parking from around campus locations to the Bill Snyder Family Football Stadium parking lots at the edge of campus where shuttles will take people to campus [39
]. Therefore, in anticipation of this future plan of campus parking relocation, it is logical for K-State to build some SPCS at the Bill Snyder Stadium lots.
There is also value for other universities to build SPCS at their football stadium parking. Often many alumni will attend university football games and may travel many miles, especially in the Midwest of the US, to attend the games. Thus, it would be convenient to have a charge station infrastructure to allow commuters with electric vehicles to charge their car during the game, especially if the commuter could not return home on the remaining battery charge otherwise. Tailgating and football games often last for about 6 h or more collectively, which is sufficient time to charge many of the car batteries. Another benefit includes allowing alumni or others to use the charge stations for social reasons as they tailgate before a football game. The SPCS would provide shade and shelter for the tailgating party. In addition, level 1 SPCS would allow tailgaters to plug in their television, grills, or other electronics. The SPCS would be an additional tailgate amenity, making alumni’s football game experience more enjoyable. The SPCS in the football parking lots would demonstrate to alumni and other game-goers the sustainability progress the university is making and thus further improve its image. In addition, the SPCS could generate more revenue for the university if tailgaters or electric vehicle owners were charged for use of the station. Extra income from tailgaters would help pay for the cost of the SPCS installation and maintenance, further reducing the payback period.
A number of employers now have workplace charging for their employees and customers [56
]. Many benefits associated with SPCS related specifically to businesses include increased clientele base, credit towards LEED certification, shelter, convenience, and a car charging service for customers and employees [5
]. As Table 3
demonstrates, customers value that SPCS encourage more EV purchases, improve air quality and reduce air pollution, improve the image of the establishment, and provide more shaded parking.
Customers typically spend an average of one hour at a store [40
]; therefore, SPCS at these businesses should be capable of both level 1 and level 2 charging. Level 1 charging is needed because some electric cars only have capacity for this charge level, some employees or customers may be parked for a significant time in the lot, and because level 1 is the best level to use with solar power. Level 2 charging is needed because it will allow customers to almost or completely charge their vehicle in the time they are shopping at the store [15
]. Since a SPCS generates about 4 kW, solar power cannot provide all the electricity required for a 7 kW level 2 charge station. Thus, the SPCS must be able to access electricity from the grid when necessary.
Since the average industry electricity cost is less than the average residential electricity cost (although exact electricity costs vary by region and negotiated agreements) [8
], the estimated payback periods may be larger for industry compared to residential. Despite the larger estimated payback period, businesses may continue to invest in SPCS due to the associated benefits such as improved green image, shade, convenience, and wider clientele base [5
]. In other cases, charge stations are installed without solar panels.
Due to the relatively high initial cost for SPCS, the economics of industrial-based SPCS do not seem particularly attractive at this point. However, some businesses are proving this perception incorrect. For example, Tesla Motors is working to install electric vehicle Superchargers across the US and other countries as well. Superchargers are 120 kW chargers that have the capability of charging 50% of a Tesla car battery in 20 min [30
]. Each station also has a half-megawatt-hour battery pack [30
]. Tesla is also working to have every charge station have grid storage capabilities and solar power [41
]. There are already 102 stations in North America with complete East and West coast coverage and coast-to-coast travel in the US, as well as 44 stations and nine stations located in Europe and Asia, respectively [30
]. The chargers are located near other amenities like restaurants, shopping centers, and cafes, allowing users to complete another task while their car is recharging [30
]. Each Supercharger costs $150,000 to install, but use of the station is free for Tesla car owners [41
]. The solar panels, covering six parking spaces, add an additional $150,000 to installation costs [41
]. These high upfront costs may seem prohibitive, but Tesla Motors’ business model is faring well. The provision of free, abundant, quick charge stations is reducing customers’ anxieties, like range and prevalence of stations, and encouraging customers to purchase Tesla’s electric vehicles [41
]. Tesla is also able to use the half-megawatt-hour battery pack to avoid utility “demand charge” fees that occur if a Model S Tesla plugs into the grid, causing high increases in electricity use [41
]. The battery pack may be used in the future for grid services, like grid stabilization, which would generate additional revenue for the company [41
]. Superchargers help support Tesla’s business model and play a large role in increasing the number of electric vehicle purchases. Despite the high initial costs for the Supercharger infrastructure, Tesla is demonstrating SPCS to be a feasible investment.
6.2.1. Single Business
The typical payback period for businesses to invest in an item or technology is 5–7 years [55
]. The larger estimated payback period for SPCS is significantly greater. One option for a business to install SPCS in an economically viable way is to engage in a partnership with another entity to share the cost.
NRG eVgo has partnered with Walgreens and is installing 120 electric car charge stations across areas in Texas [42
]. Walgreens is serving as the host site for the stations while NRG eVgo pays for the installation and maintenance, and offers subscription plans of monthly flat rates for customers [42
]. Walgreens is able to benefit from having the electric car charging stations by increasing their customer base and improving their image without paying for the charge stations. Establishing partnerships with another entity reduces the initial cost associated with SPCS.
According to the present survey, 57% of respondents were in favor of the business partnership finance option. The host business and SPCS owners both benefit from this partnership. The host company receives the benefits of SPCS, such as improved image, greater customer base, and shaded parking for free while the partnering company is able to market their name, improve their own image, and increase their profits from customers’ charging. In this case, the two partners usually determine the pay structure for the stations, which can be free charging, a membership flat fee, or an hourly rate. It is best to model the new pricing structure based on the current parking price structure at the host business; this provides consistency and reduces customer accusations of preferential treatment [22
] (pp. 28–31). If parking at the host business previously was free, it should continue to be free for customers to use the charge stations in order to compete with other businesses hosting charge stations [22
] (pp. 28–31). If parking at the host business previously cost money, the business should use the same pricing structure (hourly rate or flat fee) for the SPCS fees, although the prices may be higher.
Another viable form of partnering for the installation and use of SPCS at a reduced cost, if allowed in that state, is power purchase agreements (PPA), which 51% of survey respondents favor. PPA reduce the initial investment and maintenance cost of SPCS for host businesses since the partnering business owns the stations and thus funds the project [23
]. The host business would pay a contracted fee for the SPCS to the partnering station owner for a certain number of years, usually around 25 years, until the contract ends. Once the contract ends, the host business could purchase the SPCS from the owners at a reduced cost or renew the contract. This agreement allows host businesses to avoid the initial upfront cost of the SPCS installations, and allows the partnering business to benefit from the financial incentives and market their company name [24
]. Partnerships can allow multiple entities to benefit from the installation of SPCS.
Utilities often deal with a reputation of being anti-environment due to their continued fossil fuel use. Utilities can improve their image with the installation of SPCS. Most customers would be more inclined to support a utility if it is advancing environmental initiatives, like electric vehicles and SPCS [1
]. Regulated utilities have the obligation to provide power at a profitable rate and to provide power for electric vehicles at public locations. SPCS could generate more revenue for utilities while providing necessary charging infrastructure, and counting toward the Renewable Energy Portfolio if present in that US state. The Renewable Energy Portfolio Standard (RPS) is a mandate designed to increase electricity generation from renewable sources like solar, wind, and biomass [43
]. There is no national RPS for the US, but 31 states currently have an RPS and seven other states have renewable or alternative energy goals [44
]. This standard has been effective in encouraging electricity producers to increase the percentage of their electricity generation on renewable sources rather than fossil fuels [43
]. In addition, SPCS would help utilities meet the proposed new US federal rule to reduce the nation’s 2005 carbon emission levels by 30% from the electric power sector by 2030 [18
]. Another benefit is that the utility could sell electricity when the utility’s SPCS are being used in the evening or at night (when there is little to no solar power generated).
Utilities have the opportunity to partner with businesses or universities, supplying SPCS for an entity that serves as the stations’ host. According to the survey, 51% of respondents are in favor of a partnership with a utility to fund SPCS. Austin Energy, located in Texas and the nation’s eighth largest public owned utility, has engaged in partnerships with Wal-Mart, Sam’s Club, H-E-B, and Denny’s to install SPCS at locations around Austin [45
]. By January 2013, Austin Energy’s electric car charging sessions collectively helped save 7363 gallons of gasoline, and the electric charging, which is totally powered by renewable energy, helped prevent 1391 pounds of greenhouse gases from being emitted into the atmosphere [47
]. Other utilities can also have a positive impact on the environment and market this fact with the installation of SPCS. In addition, utilities can use electric vehicle batteries as grid stabilizers, similar to Tesla’s Supercharger battery, which is helpful for the utility’s operations [48
]. Benefits for SPCS host businesses include increased clientele base, improved image, and recognition for the support of renewable energy and encouragement for more electric vehicle purchases [22
]. It is still being debated in some states whether utilities can own and operate charging stations, and whether utilities should be the only ones to own public charging stations [49
]. Most states have yet to rule on this issue, but those who have, such as Washington and Oregon, have permitted utilities to own public stations [49
In order to pay for electricity consumed, Austin Energy customers engage in a six-month subscription for unlimited charging within the network or pay an hourly fee for use of the SPCS [46
]. For other utilities, subscriptions, hourly priced charging, or a price per kWh of electricity used are also viable finance methods for level 1 and level 2 SPCS. The SPCS charge level would depend on the utility’s partner and customer needs.
Unlike other entities, utilities have the ability to charge a certain price per kWh of electricity used if sanctioned by the utility regulatory agency that approves prices. For example, if approved, the utility agency could charge $0.15 per kWh of electricity delivered at a charge station, which would be $0.05 per mile for an electrical vehicle that averages 3 miles per kWh. With this charging structure, the payback period for SPCS is 13.5–21 years. This $0.15 per kWh charge rate is a reasonable price for utilities that results in a profit, but it is slightly high for the consumer. However, the idea for these higher priced SPCS is to have these stations available in many locations so customers can use them if they need to recharge. With an appropriately regulated price per kWh charge rate, it is profitable for the utility to sell power from the grid at the charge station.
Another finance option for these utility-owned SPCS is metered charging where customers pay an hourly rate for use of the station. This allows for vehicle turnover and encourages customers to be more conscious of their electricity consumption [25
]. To streamline the payment process, customers could simply enter their utility account information into the station and add the hourly charging fee to their utility bill [22
Subscriptions are another option that ensure the utility a set amount of revenue each month and allow the customers to charge their vehicle however often they want that month.
Charging a fee to use a charging station located at host businesses with general free parking risks low use of the station due to the competition of free charging from other entities [22
]. Customers would likely not be pleased to pay to park and charge their vehicle, when parking is usually free, and might go elsewhere to charge their vehicle. For example, survey respondents were asked how much they would be willing to spend for shaded parking, which is usually a free commodity, and 33% were not willing to spend any money. Thus, customers may choose to go to free charge station parking locations. Therefore, it would be in the utility’s and host business’s best interests to provide free charging if free parking is already offered. The electricity provided at the charge stations can be free to the EV owner, but paid for by the business associated with the parking lot. Time limits could be placed on the charging to encourage turnover and prevent exploitation of the free charging. In order to ensure that only customers use the charge stations, businesses could require customers to use a loyalty card or code, available only at their store [22
]. Another finance option includes charging businesses to place advertisements on the charging stations and using this additional revenue to help cover free charging costs. There are several finance options that utility-owned SPCS could employ. A partnership with a utility and the businesses they serve can be an effective option for increasing the SPCS infrastructure.
6.4. Public Parking Model
In cities, particularly in downtown areas, businesses often do not own parking lots, but rather the city does. Public parking is provided along streets and in lots, where there is free or metered parking, and in parking garages, where there is often an hourly rate. Parking availability is viewed as an incentive for downtown investment opportunities [50
]. Independent business owners in these urban areas believe that accommodating vehicle users allows the businesses to compete with suburban shopping centers [50
]. Customers of these businesses are from immediate and surrounding communities, and often travel downtown for errands, dining, or entertainment purposes. The local economy is improved when other city dwellers also travel to the city and spend money. However, electric vehicle owners with significant commutes may be hesitant to travel the long distance to the city if charge stations are not provided. The commuter may be unable to return home without charging their car battery beforehand. Therefore, it is wise for cities to install SPCS for public parking to encourage economic activity from these commuters as well as from other electric vehicle owners and environmentalists.
In areas with free public parking, which are often less convenient or less frequented places, free charging for SPCS should be provided. Free charging will encourage electric vehicle owners to travel to this city or area over another, and will entice them to shop at local businesses. Charging for SPCS spots adjacent to free spots, conversely, could discourage electric vehicle owners from using the stations and may cause them to charge elsewhere.
For parking spots with metered parking, SPCS should be provided with hourly rate charging. Charging an hourly rate will encourage more vehicle turnover, allowing more drivers to use the well-located SPCS spaces.
Both level 1 and level 2 charging options should be provided. Level 1 should be provided since some electric vehicles can only handle this level charging and some customers spend the majority of their day in town. Level 2 should also be provided since some customers only stay in the city for an hour or two and thus need a faster charging rate. Level 2 charging should also be used for metered parking since drivers will be parked in these spots for shorter times and will need a faster charging rate.
Cities can use a portion of sales tax to help pay for the installation, maintenance, and electricity usage of the SPCS as long as the community and government approves. Customers who are using the SPCS are purchasing items at the local businesses while parked, so the customers would be indirectly paying for the charge stations with sales tax. In addition, since commuters or tourists must pay sales tax as well, using this tax to fund SPCS seems logical.
Other options for financing SPCS include federal tax incentives, federal grants, or a partnership with a utility or company. For example, the city of Saint Paul, Minnesota partnered with the utility Xcel Energy and installed two SPCS. The stations were paid for partly by Xcel Energy and the City of St. Paul, and primarily by the US Department of Energy federal stimulus grant [51
]. This city and utility partnership has worked well for St. Paul and these entities are continuing to work with businesses and non-profit entities to develop electric car charging infrastructure in Minnesota [51
SPCS have an estimated 17–26.5 year payback period when simply considering revenue received from generated solar power (although this varies by utility and region). This payback period decreases, however, when factoring in federal incentives, grants, or partnerships the city has formed. In addition, revenue from sales tax and hourly charge rates for charging, if implemented by the city, can also decrease the payback period further. To further decrease the payback period, the revenue rate for SPCS can also be increased annually. Cities may still choose to invest in SPCS no matter the payback period because of the benefits associated with them such as infrastructure for EVs, shade, convenience, and improved image [5