December 6, 2023

Empowering Sustainable Fleets: Utilities’ Role in Accelerating Electric Vehicle Fleet Conversion

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7 Min. Read

The U.S. is going through what could be the largest energy transition in the country’s history. Electric vehicle fleet conversion is a major trend contributing to this transition and shaping the future of transportation. Businesses, municipalities, and fleet managers are increasingly on board with EV adoption, but widespread adoption requires a joint effort that involves utilities.

In this article, we’ll explore the role of utilities in accelerating the transition to electric vehicles and supporting EV fleets.

The Electric Drive: Why Fleets Are Pivoting

Electric vehicle fleet conversion is a tangible way to achieve ESG goals for businesses, municipalities, and other organizations, and this popular trend of sustainable mobility is rapidly gaining traction across the U.S. In fact, 17% of fleets have already adopted EVs in some capacity, and many more are considering how an electric fleet can help them meet sustainability initiatives, enhance business operations, and reduce vehicle fuel and maintenance expenses.

The Benefits of Fleet Electrification

Adopting electric fleet vehicles yields multiple benefits, ranging from creating an eco-friendly image for the brand to cost savings. On average, fleet managers can expect to save with an average maintenance cost of $4,246 every five years, beyond additional fuel savings.

Electric Vehicle Fleet Conversion by the Numbers

There are opportunities for electrification in several sectors, including last-mile delivery, public transit, school bus fleets, home services, and car rentals.

The USPS is leading the way with a project to deploy over 66,000 EVs by 2028, which would create the nation’s largest electric fleet. The rental market is also driving electrification, with Hertz predicting over 2 million EV rentals by the end of 2023, and with EVs already representing a quarter of the company’s fleet.

At the municipal level, more cities are adopting EVs and rethinking public transit. There are now over 2,200 electric school buses on the roads, paving the way for a clean public transit infrastructure.

Utilities: Powering the Transition

Access to charging remains one of the greatest barriers to electric vehicle fleet conversion. Utilities can make a difference by developing a charging infrastructure that reflects the changing needs of the community.

The Need for an Adequate Energy Supply

A Level 2 EV charger uses 7.2 kilowatts on average, and up to 19.2 kilowatts per hour (kWh), depending on the EVSE model. Depending on the EV model, the charger needs to deliver 0.20 to 0.50 kWh per mile driven, which means fleet vehicles need to draw power for a few hours to get enough charge for their daily route.

At the fleet scale, energy usage can increase quickly, especially if the fleet’s duty cycle means that several EVs have to charge at once.

Infrastructure Investments

A key aspect of powering the transition to electric fleets is increasing energy production. This shift is already happening with investment in renewables and solar energy represented 45% of the new energy production capacity added during the first half of 2023, with commercial and utility projects leading the way.

A reliable grid is another crucial element. Electric network reconfiguration can result in a more effective use of distribution feeders. Some utilities are also investing in multi-value grid infrastructure updates that automatically switch between different sources and transmission methods based on real-time demand and costs.

Integrating storage solutions into the grid will create an alternative to wire solutions. Battery energy storage systems can enhance reliability while storing energy closer to consumers to save on transport costs.

Partnerships and Collaborations

Once these grid upgrades are in place, utilities can connect with fleet operators and support electric vehicle fleet conversion through education and incentives.

For instance, Consumer Energy has already helped 50 businesses adopt electric fleet vehicles through its PowerMIFleet program, which covers the cost of electrical upgrades at the building level.

Incentives and Initiatives: Fueling the Shift

The total cost of electric fleet ownership is an important consideration for fleet managers. Incentives from energy providers can be a powerful argument in favor of electric vehicle fleet conversion.

Support Programs

Fleet managers can benefit from federal, state, and municipal incentives, including a federal credit of up to 30% of the initial purchase price on some EV models.

Utilities can help reduce the upfront cost further with rebates on charging stations, help with electrical upgrades, a preferred energy rate, or even support for converting existing vehicles.

For instance, Wisconsin-based fleet managers can get help from We Energies to cover the cost of four Level 2 or DC fast chargers, and many other utility programs already exist across the country to support the adoption and accessibility of EV adoption and EV charger installation in the U.S.

Educational Outreach

Research suggests that educational efforts surrounding EV adoption remain insufficient, even though 59% of consumers would prefer more information from their energy provider.

Developing outreach programs that show tangible benefits through personalized assessments or case studies can go a long way in supporting electric vehicle fleet conversion.

Collaborative Pilot Programs

EV fleets are still at an early stage. Utilities can foster these efforts by developing pilot programs and working with local fleet managers to identify solutions that align with their needs.

Challenges Ahead: Grid Management and Scalability

Utilities need to anticipate challenges linked to widespread fleet electrification.

Increased Energy Usage

Electric vehicle fleet conversion will create new energy usage patterns and make existing peak demand times even more challenging to handle.

Utilities should establish a dialogue with fleet managers to better understand fleet duty cycles and anticipate new usage patterns. Incorporating renewables is an effective way to boost production capacity, and incentives such as time-variable pricing or demand response programs can help manage the load at the community level.

Smart energy management systems, battery storage, and programs that decentralize fleet charging by promoting at-home charging for drivers can also make a difference.

A New Energy Solution Model

Utilities can build modern energy solutions by reframing their role as energy providers and positioning themselves as energy distribution marketplaces instead. This new model can leverage multiple energy sources, ranging from battery storage to local solar arrays, increase resiliency, and manage costs.

The key is building an open energy infrastructure that facilitates interactions between energy systems and allows for future upgrades. Utilities can also explore new pricing models and advocate for new regulations to support this transition.

Partnerships will be central to this new model, and it’s no surprise that 80% of energy providers are looking into creating new partnerships. Utilities should collaborate with local agents who own renewable energy systems and startups that can develop innovative energy management systems.

Exploring Innovations

With time and the right partnerships in place, utilities can build a modern infrastructure that leverages the latest innovations. For instance, EVs and chargers that support smart charging could enhance communication with the grid.

Vehicle-to-grid systems are another interesting innovation that could turn EVs into a source of energy when local demand increases. Some utilities are also exploring demand charging and net metering programs to bill more accurately based on energy consumption intervals and buy energy from local solar array owners.

In the future, we could see more utilities take advantage of alternative distribution models, such as EV-charging roads.

Successful Transitions Powered by Utilities

Taking a strategic approach to promoting fleet electrification and working with the right partners will ensure success.

Getting Started With Quality Data

Avista Utilities, an energy provider operating in Washington, Idaho, and Oregon, launched a pilot program in 2016. Over the next three years, Avista installed more than 400 charging ports, including 24 ports for EV fleets.

This pilot program allowed the energy provider to collect data, better understand energy consumption across different use cases, and identify load profiles and opportunities for cost savings.

Utilities can also collect valuable data by electrifying their own fleets. Close to half of water utility organizations currently have plans for electric vehicle fleet conversion.

Obtaining Tangible Benefits Through Partnerships

Collaborating with fleet managers is crucial for understanding their needs and challenges. Working with startups will give you access to the latest energy innovations, and partnerships with EV manufacturers can also be beneficial for better understanding what it takes to charge their vehicles efficiently.

Converting to an Electric Fleet: What’s Next?

Utilities have a central role to play in supporting electric vehicle fleet conversion. Offering incentives, developing modern infrastructure, and forming the right partnerships are essential elements for achieving widespread fleet electrification.

As an electrification leader, Qmerit can help you identify the best strategies for fostering electric vehicle fleet conversion in your community and explore the latest innovations, such as bidirectional charging. With over 269,000 EV charger installations to-date and the largest network of certified installers across North America, Qmerit can support your business operations as you help your energy customers join the energy transition. We make it easy for your residential and commercial electrification customers and are here to help you explore new strategies as we work together in the greatest energy revolution of our time.

For more information on how you can make a difference in your community and support fleets transitioning to electric vehicles, contact Qmerit today!

Author: Tom Bowen

Tom Bowen

President, Qmerit Solutions and Commercial Electrification