Navigating the Electric Highway: How to Save on At-Home Electric Car Charging Costs

There is no doubt electric vehicles (EVs) are increasingly appearing on our nation’s highways. As the world embraces sustainable solutions, the cost to charge an EV remains cheaper than gas prices, and battery life grows stronger. This makes more people think about switching to electric cars. 

Increasing EV sales pushed the total number of electric cars on the world’s roads to 26 million, up 60% relative to 2021, with battery-electric vehicles accounting for more than 70% of total annual growth, as in previous years. 

As electric car ownership rises, new drivers often wonder about the impact on their electricity bills. The good news is home charging is usually the most cost-effective option. While public stations offer convenient on-the-go charging, their rates typically range from $0.30 to $0.60 per kWh, significantly higher than the average home rate of $0.16. In fact, around 90% of electric car charging happens overnight at home, where cheaper rates prevail. So, when it comes to keeping your electric car fueled, plug in at home whenever possible for the most budget-friendly solution.

Home charging station costs come down to equipment and installation expenses, as well as your home electricity rate. Buying and installing a high-quality home charging system is approximately equal to a year of typical maintenance for a gas-powered vehicle. 

The minimum tax credit provided by the IRS for purchasing a new electric car is almost double the amount of buying and installing a new home-charging system. That tax credit, in many cases, would cover the cost of both equipment and installation.

Charging an electric vehicle at home is a convenient and cost-effective way to ensure your EV is ready to hit the road when you are. Home charging equipment typically includes a Level 1 or Level 2 charging station, with Level 2 being the more popular (yet more expensive) choice due to its faster charging speed.

Level 1 chargers operate on a standard household outlet (120 volts) and have a charging rate of about 2 to 5 miles of range per hour. On the other hand, Level 2 chargers require a dedicated 240-volt circuit outside or in your garage and offer a much faster charging rate, providing about 10 to 60 miles of range per hour, depending on the charging station’s power capacity and the EV’s compatibility.

Since most garages in existing homes (not new builds) do not come standard with designated 240-volt plugs, there is an additional one-time expense of adding these upgraded outlets. On average, it can cost between $250-$800 to have an electrician install one.

Using the average EV’s energy consumption, a home EV charger would use around 11.81 kWh per day to charge the car to replenish the range driven. This translates to about 353.3 kWh per month and 4,310.65 kWh per year. With the average electricity rate at 16 cents per kWh, that’s $1.92 a day or $56 a month. The average car uses about 490 gallons of gasoline a year. The average gallon of gas costs $3.56 in 2023 in the U.S. That’s $1,744 a year, or $145 a month.

Additionally, the average cost of an EV is about $53,000 while the average price in 2023 for a new car of any kind was about $48,000. Ultimately, over the longer haul, an EV can save you a ton of money and is better for the climate.

After considering the gas savings above, one must also consider electric rates. 

Rates are subject to many factors, including the region where you live, the time of year, and even the time of day when peak charges apply. Here are a few of the more common rate types you’ll find: 

1. Fixed rates: Some regions and utilities employ fixed-rate pricing, where consumers pay a consistent rate for electricity regardless of the time of day or the total amount consumed. While straightforward, this model may not incentivize energy-conscious behavior.
2. Time-of-use (TOU) rates: TOU rates involve variable pricing based on the time of day, encouraging consumers to shift energy-intensive activities to off-peak hours when electricity rates are lower. EV owners can benefit from charging during these periods, reducing the overall costs of powering their vehicles.
3. Demand charges: In some cases, utilities impose demand charges based on the highest rate of electricity consumption during a specified period. EV owners should be aware of these charges, as they can significantly impact the overall cost of home charging.

For the most part, electricity usage and costs are at their lowest late at night when some utilities provide special low rates for when demand is lightest. That’s good news for anyone considering an EV.

Many people charge their EVs overnight at home. It can take anywhere between 3 to 12 hours to fully charge your battery, depending on the car model and charging level.

Your electricity rates aren’t the only thing that determines how much it will cost to charge your new EV at home. Other factors, such as battery size and driving habits, also come into play. Let’s review these additional factors:

1. Charging speed: The charging speed directly influenced electricity consumption and, in turn, the cost of charging. While Level 1 chargers are slower and less taxing on the electric bill, Level 2 chargers are faster but may contribute to higher costs.
2. EV battery capacity: The battery capacity of an EV plays a crucial role in determining charging costs. Larger batteries will require more electricity to reach a full charge, increasing the cost.
3. Charging habits: Regularly charging your EV to 100% all the time may not be needed and can make your electricity bills higher. Consider optimizing charging based on your daily driving needs.

Several options come into play when getting the most bang for your buck in charging an EV at home.

1. Take advantage of off-peak rates: If your utility offers TOU, take advantage of lower prices during off-peak hours. Schedule your EV charging to align with these windows.
2. Explore energy-efficient chargers: Investing in energy-efficient Level 2 chargers can be a wise choice in the longer term. These chargers convert more electricity into usable energy for your EV, reducing waste and lowering your overall bill.
3. Use smart-charging technology: This technology allows EV owners to remotely monitor and control charging sessions. By leveraging these technologies, you can schedule charging during low-demand periods, optimize energy use and possibly benefit from real-time pricing adjustments.
4. Consider solar power integration: Using solar power to charge electric vehicles can save money and potentially qualify for tax benefits. This is especially true for people who have solar panels. However, it is important to check if this is permitted in your location.
5. Choose a fixed-rate plan: With a fixed-rate plan, your electricity rate remains constant regardless of market fluctuations. You pay the same rate per kWh throughout your plan’s term. In contrast, a variable-rate plan is subject to market changes, and the electricity rate – and your electricity bill – can fluctuate from month to month based on factors such as supply and demand.

Electric vehicles are becoming more common on our roads. It is important for current and future owners to understand the costs and process of charging them at home.

By being mindful of factors that influence the costs, EV enthusiasts can optimize their home charging experience. As technology continues to advance and more innovations emerge in the realm of sustainable transportation, the future of home EV charging holds promise for even greater efficiency and affordability.