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Massachusetts utility National Grid has launched a new initiative to give drivers rebates for charging their electric vehicles during off-peak hours, but some advocates worry the incentives aren’t high enough to propel meaningful change.
The new program rewards customers who charge their vehicles between 9 p.m. and 1 p.m., when demand on the grid is lower and the power flowing into the system is generally cleaner and less expensive. The goal of the program is to ease the burden on the grid, help reduce greenhouse gas emissions, and motivate more drivers to consider switching from gasoline-fueled cars.
“It helps improve the business case for charging at home and hopefully encourages some customers to buy electric vehicles,” said Rishi Sondhi, clean transportation manager for National Grid.
Today, electric vehicles make up just 56,000 of the 5 million vehicles registered in the state. But Massachusetts has set the ambitious target of putting 300,000 zero-emissions vehicles on the road by 2025 as part of its plan to achieve carbon neutrality by 2050.
As electric vehicle adoption increases, so will the load on the power grid. Currently about 44% of electric vehicles’ charging in Massachusetts is done during times of peak demand, according to National Grid’s testimony to the state public utilities department. If that pattern holds as more people buy electric vehicles, the transmission and distribution infrastructure will require expensive upgrades, and older, dirtier power plants will be called into action more often.
Getting drivers to charge their vehicles during times of lower demand could help avoid the worst of these impacts.
“It is much more beneficial to the power grid and also the planet when [electric vehicle] drivers charge during off-peak hours,” said Joseph Vellone, head of North America for Ev.energy, a charging software company that is partnering with National Grid on the program.
National Grid hopes its new program will help drivers make that shift. During the summer, customers will receive a rebate of 5 cents per kilowatt-hour for charging during off-peak hours; the rest of the year the rebate will be 3 cents.
Since the program opened to the full customer base in April, about 1,000 people have enrolled. Current participants are on track to save about $100 per year as compared to charging during peak times.
A consumer who drives a Nissan Leaf 1,000 miles per month would end up saving roughly $15 each month in the summer — a savings of 17.3% compared to standard National Grid rates — and $9 per month — 10.4% savings — over the rest of the year. Savings would likely be lower for a plug-in hybrid, which uses less electricity to travel the same distances.
Ev.energy’s platform connects to participating electric vehicles and monitors their charging activity. Massachusetts customers enrolled in the program can use the Charge Smart MA app to see their charging history and savings. The platform is essentially the go-between, urging consumers to charge at optimal times and displaying the results of their choices in the app.
“We’re just collecting the charging data and leaving it to the customer to do the right thing, then rewarding them for it,” Vellone said.
So far, customer feedback has been good, Ev.energy reports. Orland Pacheco, an early electric vehicle adopter who lives in Rockport, participated in the pilot off-peak charging program and is pleased with the results and the feeling that he is participating in meaningful change.
“I want to be a responsible consumer,” he said. “I also want to help others understand — consumers have to be a part of the solution.”
The right size for rebates
Encouraging off-peak charging is vital for a smooth transition to electric transportation, said Anna Vanderspek, electric vehicle program director at the Green Energy Consumers Alliance. However, the rebate levels National Grid has set are far too low, she said.
The current numbers reflect the lower cost of buying power during off-peak hours and the savings gained by avoiding the need to build more power plants to meet peak demand. National Grid has said the rebate levels were set by simply passing on its savings to the consumer.
But there are also other ways overnight charging saves money for the utilities that are not accounted for in the current numbers, Vanderspek said.
To determine the scale of these savings, the Green Energy Consumers Alliance asked nonprofit consulting group Applied Economics Clinic to assess how much cost utilities could really avoid if customers shifted their vehicle charging to off-peak hours. The clinic found that National Grid’s calculations fail to account for the fact that off-peak charging could prevent the need for costly upgrades to transmission and distribution systems and would lower the company’s spending on emissions abatement by cutting down on greenhouse gas emissions.
If these and other factors were incorporated, the savings from off-peak charging would be between 13.1 cents and 15.1 cents per kilowatt-hour, the clinic testimony concluded. National Grid should set its incentive rate at something closer to these numbers to be accurate and transparent, and to provide a more powerful incentive to would-be electric vehicle buyers, Vanderspek said.
“We need off-peak rebates, but we need them to account for all the benefits,” she said. “That will accurately reflect the costs of charging at that time, but will also increase the price signal.”
It is also important for the state’s other major utility, Eversource, to launch an off-peak charging program and scale its rebates appropriately, she said. Because the two major utilities have different offerings right now, electric vehicle salespeople can have a harder time outlining the benefits for potential buyers, creating a confusing and less appealing market for zero-emission vehicles.
Even as the new program is kicking off, however, National Grid is already looking ahead to new versions of off-peak charging programs. Ev.energy’s software can also execute what is often called managed or flexible charging, taking control of individual drivers’ charging systems and turning the charging on when demand on the grid is low and off when demand rises.
National Grid has requested state approval to implement such programs and is waiting for the decision from regulators.
“It could be coming to Massachusetts, which is very exciting,” Vellone said.
There is even some discussion about the possibility of managing charging activity to coincide with times when renewable power sources are contributing intensively to the grid, particularly as anticipated offshore wind developments come online. And in the more distant future, there could be incentives for consumers to use their electric vehicles for energy storage, earning rebates for discharging power back into the grid as needed.
For now, the existing program will help National Grid prepare for a more electrified transportation future by normalizing off-peak charging as expected and conventional behavior, generating valuable data about the charging behavior of consumers, and allowing the utility to test out different platforms and communication strategies.
“We felt that this is the right time to start,” Sondhi said, “to get ahead of the curve so we’re ready with our systems and our processes in place.”