The electrification market has been growing at a fast pace. The infrastructure is also expanding to match this demand with the development of an improved charging network. There are many opportunities to explore for drivers, commercial fleet managers, service technicians and more. Read on to learn more about the future of electrification.
The electrification industry is continuing to grow thanks to stronger EV sales and investments in developing the charging network.
Getting more EVs than ever on the road
In 2021, the number of EVs sold doubled compared to 2020, reaching 6.3 million. Experts predict that sales could reach 10.5 million in 2022.
China and Europe may be leading this market, but U.S. consumers are becoming increasingly receptive to EVs: 39% are somewhat likely to very likely to consider an EV purchase. Automakers will also play a major role in encouraging EV adoption. General Motors has already announced its plan to have an all-electric lineup by 2035.
Commercial EV adoption is also increasing. This market is poised to grow at a CAGR of 29.73% before 2026.
Building a better charging infrastructure
A side effect of EV adoption is a greater strain on the electric grid. The EV charging station market currently includes close to 43,000 public stations, which is largely insufficient. Plus, the distribution is very uneven.
The Biden administration is pushing to develop a better network with an additional 500,000 stations across the country. The EV charging station market, which was worth $6.97 billion in 2021, could exceed $51 billion by 2027.
Modernizing the electric grid
However, the infrastructure challenge goes beyond access to chargers. The electric grid that powers these chargers needs an overhaul.
The current grid is aging. It was designed to rely on a few power stations that would cover large service areas thanks to an extensive distribution network. This model suffers significant losses during transmission. Further, any issue with a single power station affects a large area.
The Department of Energy has developed a $2 trillion plan to rebuild and modernize the infrastructure. This plan includes provisions for creating a more resilient electric grid, shifting to cleaner energy sources and funding research to improve the transmission system.
A potential solution is to focus on grid-scale battery storage to reduce the strain on power plants during peak usage time and to meet residential and commercial EV charging needs.
The rise in electrification translates into higher demand for different services needed for adoption and maintenance.
Home charging installation services
More EV drivers are opting for home charging as an alternative to using public stations. Level 1 charging has always been available at home since this method requires the driver to plug their vehicle into a traditional outlet.
However, Level 2 chargers are gaining popularity thanks to incentives from states and utility companies. EV manufacturers are also helping with adoption. Globally, the EV charger market will grow at a 28.5% CAGR between 2021 and 2028.
Fleet charging services
Electrification results in lower costs for commercial fleets. It also helps organizations meet their environmental goals.
Electrification efforts often result in installation projects that require planning on a larger scale, which has led to higher demand for fleet charging services. Service technicians can benefit here since the fleet charging service market could be worth $15 billion a year by 2030.
Solar and battery banks
Due to the current limitations of the energy grid, homeowners and commercial users are turning to new solutions.
Solar installations have been on the rise for the past decade, showing an average annual growth rate of 42%. Solar energy in combination with battery banks helps EV owners save on charging costs and gain some independence from the grid. Utility companies and homeowners are leading the way toward solar adoption and battery banks, but we could see more commercial installations along with fleet electrification.
Battery bank/storage technology is becoming more popular. Battery banks store power so that residential and commercial users can access it when needed. This system improves resilience and helps users avoid the high rates that utility companies charge during peak hours.
In business, electrification allows drivers and fleet managers to stop relying on finite resources, a trend echoed by the current surge of interest in renewable energies.
Federal, state and local governments are also committing to building greener infrastructure. For instance, the Department of the Interior is selling offshore wind leases and developing a program to support clean energy adoption in underserved rural communities.
Some states have adopted plans to transition to clean energy. For example, California aims to reach a 50% target for renewable energy by 2025. The federal and state governments also offer incentives and credits to support homeowners and businesses willing to invest in renewable energy.
Overall, the clean energy market represented 90% of new power capacity expansion globally in 2021.
The possibilities for job creation, commercial fleet electrification, residential access to charging and more are endless.
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