How Multifamily Owners Can Overcome EV Charging Installation Capital Constraints

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The EV charging demand is here to stay and multifamily property owners need to prepare to meet tenant needs.

In 2023 alone, there was a 60% year-over-year increase of EVs sold compared to 2022. And that doesn’t even account for the whopping 350,000 EVs sold in the U.S. in the first quarter of 2024. Couple these with the fact that EVs continue to become more affordable, and it’s safe to assume that more tenants will be demanding EV charging across your properties.

EV charging used to be a nice-to-have amenity across multifamily communities. But forward-thinking multifamily owners have shifted from whether they’ll install EV chargers to when and how – especially considering that some installation projects can take up to 2 years.

This often leads multifamily property owners to wonder, “How am I going to pay for this?”

While a direct cash purchase of EV charging installation, operations, and maintenance gives multifamily owners the most flexibility and control of the project, it also requires a significant out-of-pocket investment that might not be budgeted for or receive investor approval. An attractive alternative gaining steam includes different incentive and financing options aimed at reducing initial and ongoing EV charging costs.

Take Advantage of EV Charging Grants, Rebates, and Incentives

There are various incentives available to help significantly reduce the cost of purchasing and installing EV charging stations, making it a more financially viable option for multifamily owners.

Federal incentives have been created to help support the need for EV charging stations. The Alternative Fuel Infrastructure Tax Credit is available for commercial buildings through 2032 and can cover 30% of the cost per EV charger, up to $100,000 per charger. The U.S. Department of Housing and Urban Development (HUD) has set aside $1 billion in funding for “projects that improve energy or water efficiency, enhance indoor air quality or sustainability, implement the use of zero-emission electricity generation, low-emission building materials or processes, energy storage, or building electrification strategies, or address climate resilience, of an eligible property.” EV charging is included in this funding opportunity.

While federal incentive programs typically involve many qualifications to be met to receive funding dollars, multifamily property owners can also utilize state, local, and municipal grants and rebates to help offset costs. States such as California, New York, Massachusetts, Colorado, and Utah currently offer EV charging financing.

In addition, many utility companies have begun offering incentives and rebates for station installation. Some examples of companies with these programs include Southern California Edison (SCE), Pacific Gas and Electric (PG&E), Consolidated Edison (ConEd), Eversource, National Grid, SRP, Austin Energy, Los Angeles Department of Water and Power (LADWP), and Rocky Mountain Power (RMP). Utility companies may also offer financial assistance for the installation of electrical infrastructure like transformers or wires.

Qualifications for each incentive program differ heavily, however, we often see that higher installation projects better qualify for these EV charging funding opportunities. For example, projects looking to install 40 charging stations may be deemed more qualified and receive additional funding than those only installing 4 stations.

Navigating federal, state, local, and utility incentives is cumbersome and if not prioritized, can leave money on the table for multifamily property owners. Working with a turnkey electric vehicle supply equipment (EVSE) partner takes the heavy lifting from owners and helps ensure you take advantage of the best funding opportunities based on your location, portfolio, and property goals.

Explore EV Loan and Leasing Options

Commercial loans and equipment financing offer multifamily property owners another option to install EV charging stations. Banks offer commercial loans that can be utilized to fund EV charging projects and typically have a fixed interest rate and repayment terms. Local credit unions also often provide competitive loan options for community projects, including EV infrastructure, with potentially lower interest rates and flexible terms.

Equipment financing options, such as equipment leasing and manufacturer financing programs, allow property owners to partner with a specialized lender. These leasing options offer property owners competitive rates and flexible repayment terms to spread the cost of their project over time, through either monthly or annual payments.  

Consider a Third-Party Ownership Model

Multifamily owners also have the option to utilize a financing model where a third-party owner pays all EV charging installation, maintenance, and operational costs and collects the revenue from charging. This helps to alleviate upfront capital constraints for EV charging deployment and allows multifamily owners to benefit from new revenue-sharing models, enhance tenant satisfaction, and build a scalable strategy as demand grows. However, it’s important for multifamily owners to understand the pros and cons of a third-party ownership model to help decide if it’s the right fit for them.

Third-Party Ownership ProsThird-Party Ownership Cons
No upfront investment, alleviating budget concerns.Typically requires a 10 to 12-year exclusive agreement. With strict terms, the third-party owner may not allow the property owner to make changes outside of the agreement.  
Allows owners to allocate capital to other critical projects or improvements.Not every site across the multifamily portfolio may qualify.
Provides residents with a decision-driving amenity.Multifamily owners have less control over key decision-making, like driver pricing, where and when to add stations, type or number of chargers, or access for tenants.
Multifamily owners have less control on key decision-making, like driver pricing, where and when to add stations, type or number of chargers, or access for tenants.Multifamily owners have less control over key decision-making, like driver pricing, where and when to add stations, type or number of chargers, or access for tenants.
Alleviates the stress of maintenance and support from property manager’s plate.Alleviates the stress of maintenance and support from the property manager’s plate.

Implement a Charging-as-a-Service (CaaS) Model

Similar to a third-party ownership model, a Charging-as-a-Service (CaaS) model puts the initial financial burden on an outside party. It focuses on a subscription or usage-based model to alleviate upfront costs from the multifamily property owner. In this case, the outside party doesn’t have to carry the financial risk, opening more possibilities for the type of project, the sites, the number of chargers, and so on. Again, this model also comes with its own set of pros and cons that should be considered by multifamily owners to ensure it’s the best EV charging funding solution.

CaaS Model ProsCaaS Model Cons
Makes budgeting more predictable for multifamily owners because operational and maintenance costs are included in service fee. During the duration of the contract, some contracts authorize a transfer of property for a nominal fee at the end of the termWhile there is no upfront cost, the subscription and usage fees may exceed net revenue from chargers.  
Ensures continuous service improvements outside of installation and basic maintenance.Property owners have limited control over how chargers are operated, maintained, and serviced.
Makes budgeting more predictable for multifamily owners because operational and maintenance costs are included in the service fee. During the duration of the contract, some contracts authorize a transfer of property for a nominal fee at the end of the termActual costs can fluctuate due to usage rates. No residual asset value since the multifamily owner doesn’t own charging stations.  
Typically guarantees service and technology upgrades. 
Offers more flexibility (number of chargers, hardware, and software. ) 

Leverage an EVSE Partner for Long-Term Strategy

It’s understandable that some multifamily owners would rather avoid using another party’s capital for any property improvement. But when it comes to EV charging, it’s important to not fall victim to the “do nothing” mentality. Now is the time to start planning your EV charging project and identify the best funding mechanism to help meet your goals and tenant needs.

Working with a turnkey EVSE partner, like SitelogIQ, can help you plan for your current needs and the future. Our experts have helped deliver dozens of successful EV program rollouts, including one for a multifamily customer who was struggling with capital constraints. We reviewed their existing infrastructure and created a phased plan to immediately install 2 charging ports and install more down the road, helping to meet their short- and long-term goals.

We utilize a centralized approach for EV charging projects that enables us to deliver value to our customers by providing:

  • Single end-to-end accountability with an EV rebate, incentive, and warranty management to save time and money.
  • Optimized efficiency and savings due to our EV expertise to determine the best options to meet your property’s needs, such as implementation timing, install location, scale, and frequency of use.
  • Top-tier vendor relationships, buying power, cohesive project management, and consistent designs for a cost-effective rollout.
  • Unmatched speed and nationwide scale to execute portfolio-wide initiatives due to best practices, which avoid common pitfalls from an overly simplistic approach or lack of experience.
  • Access to our best-in-class program management tool, mySiteIQ, which provides on-demand data and visibility into projects.

Contact us today to learn more about our EV charging consulting services.