261 - The Home Charging Cost Episode

Hi. I'm Gary and this is episode 261 of EV Musings a podcast about renewables, electric vehicles and things that are interesting to electric vehicle owners.

On the show today we'll be looking at home much or how little it can cost you to charge an EV if you have home charging.

This season of the podcast is sponsored by Zapmap, the free to download app that helps EV drivers search, plan, and pay for their charging.

Welcome back to season 14 of the podcast. Happy to have you here if you’re returning. Happy to see you if this is your first time listening and watching.

Yes, I said watching. As far as possible all the episodes this season will be both audio AND Video for those who like to do things that way.

If you’re listening on the audio there should be no difference between what you used to hear and what you hear now.

If you’re watching on the video it should sound about the same but you get the added benefit (or not) of seeing me and the people with whom I’m talking.

Lots in store this season including episodes on Canopies, Battery repairs, Charger Maintenance, WLTP (and why it shouldn’t be trusted), marketing evs to potential customers and LOTS more.

But a major part of this season will be a series of episodes called EV101. In there I’ll be producing a concise set of episodes that cover ALL aspects of electric vehicle ownership right from whether you should get one, who should get one, how to buy or lease them, taking delivery, running an EV, charging an EV, and planning long journeys.

If you’ve never even considered an EV these are the three episodes that will make it super easy for you to make that transition (or not, if that’s appropriate)

I’m really looking forward to putting out those episodes.

Once again I’m going for a mid-season round table with a couple of guests and an end of season round table with three guests. Always popular, always interesting.

Our main topic of discussion today is home charging costs.

We spoke last season about the various ways and means that someone living without a home charger can charge their electric vehicle. We looked at AC charging, rapid charging, co-charging, subscriptions etc.

We also looked at options for people who can charge at home but don’t have off-street parking. That includes quite a large chunk of the potential EV-buying population.

We talked about things such as bayonet chargers and gully charging.

What we didn’t cover in that episode was some of the costs and tariffs associated with that.

These, obviously, also apply to people who can park their cars off street and charge from their own wallbox at home.

Today I want to look in a little more detail at the options available for someone who has their own wallbox and is looking to reduce their charging costs.

As usually I like to start with a bit of history.

There was a point when it was actually cheaper to charge on public charging than it was for me to charge at home. This was about 7 years back - prior to the Ukraine invasion - when wholesale electricity charges were reasonably low and commercial rates were lower than domestic rates. I’ve said before on this podcast I used to charge in public for 9p/kWh with a subscription (pre VAT).

Unfortunately, those days are long gone.

I have electricity bills from: 2019

12 months later that had gone to 37.94p/kWh with a standing charge that stayed at 41p/day

So some pretty impressive (and worrying) movement

But my situation will probably not match your situation for a number of reasons. One reason is that my tariffs are unique to my supplier and my region. The rate I get - living in the South East - will probably be different to the rate my mother gets living in Yorkshire, despite the fact we’re on the same energy supplier.

A lot of people like to lock in their tariffs for 12 months or so. This guarantees that prices won’t rise on them until the contract expires. There were some people who put together some really great deals with energy companies locking them in to low energy tariffs over long periods of time.

But within the whole sphere of tariffs there are numerous different variations. There are fixed tariffs - the sort I’ve just mentioned - and there are time-of-day tariffs. A time of day tariff gives you one or more windows of time during the day when the rate charged for the electricity used is different.

hours between: 00:30

per cheap electricity between: 04:00

For me that gives me a ‘day rate’ of 28.74p/kWh, a ‘cheap rate’ of 14.09p/kWh for three slots during the day and a peak rate of 43.11p/kWh for 4 hours in the evening.

Companies like OVO Energy have an Anytime charging tariff which gives you 7p/kWH car charging, 24/7. Any other energy used is charged at a standard fixed rate which is lower than the rate linked to a tariff from Octopus Energy. The downside to this is that the cheap energy is only calculated via the charger which means you can’t use it to power the rest of your house like you can with an Octopus tariff.

Variable tariffs need a smart charger installed at your house. Most electricity companies will do this free of charge for you.

I did a whole episode on home EV tariffs back in episode 207 The ECO Tariffs Episode where Alex Thwaites from OVO Energy came on and chatted to us about their offerings.

Suffice it to say that if you look around you’ll find lots of tariffs and offers that give you cheap home charging alongside certain conditions and criteria.

Sometimes the charging is limited in time, sometimes it’s limited in scope, sometimes it’s both.

It’s up to you to evaluate what’s what and make your choice.

There’s no doubt that being able to charge at home for a comparatively small cost is a great attraction to owning an electric vehicle.

In fact that’s one of the things that many people keep throwing up as a barrier for EV adoption ‘There’s the haves and the have nots when it comes to charging. If you’ve got a driveway you’re getting much cheaper charging than those who have to use public charging’

On the face of it that statement is accurate.

But I do want to throw in a note of caution when looking at these calculations. That’s this: You’re not actually paying 7p/kWh. You’re paying more. How much more actually depends on many factors - not all of which are within your control.

So let’s do a little exercise to explain what I mean.

This is based on something I stumbled upon at the end of last season.

It relates to everyone who thinks that home charging is in the region of 7p/kWh and when you compare that to public charging - which can be anything up to 89p/kWh - it looks really bad.

But I’m here to tell you that your home charging isn’t 7p/kWh

We are being lulled into a false sense of security by those tariffs. In the long run they are untenable.

Here’s why:

Yes, electricity is cheaper overnight at certain times of the years (after all we had economy 7 rates for decades before we had EVs). But it was never as cheap as it is now and the difference was never as big. For me the overnight cheap tariff is around 75% lower than my peak daytime tariff. That’s a lot more than economy 7 energy is, at around 25% lower.

Renewables and lower energy usage overnight can drop the price down - occasionally to a rate that is below zero - meaning you can get paid to charge your car in certain situations.

But this should be looked at as a short-term anomaly NOT a full time thing.

OVO energy are offering a 24/7 EV charging rate of 7p/kWh. This, obviously, must be losing them an amount of money because electricity is not priced at 7p/kWh delivered to your house, 24/7.

If it was they could, surely, add a couple of p/kWh profit and offer that as a 24/7 rate for ALL electricity in your house not just charging. But they don’t

Even the Octopus energy 7.5p/kWh rate for limited hours in the nighttime cannot be covered by cheap renewable energy every night of the year.

There is no way of knowing the exact cost of electricity as supplied by companies like OVO Energy or Octopus Energy. The closest we can do is track the Agile Octopus tariffs over the years to get an approximation of the wholesale rates.

For those that don’t know, Agile Octopus is a tariff run by Octopus Energy that varies the energy rate every 30 minutes throughout the day. The rates are very closely linked to the wholesale price of energy on the market. Obviously they’re not one a one-to-one basis. But if the Agile rate is high you can guarantee the wholesale rate is high, and vice-versa.

: 2004

Across the whole of: 2024

All those data come from a site called Agilebuddy which is linked in the show notes.

There are reasons why companies offer these rates and, perhaps, I’ll put an episode together on them at some point.

I also don’t want you thinking that I am against these rates and what companies such as OVO Energy and Octopus Energy, and others are doing to promote EV adoption. I’m not.

I just want you to know that these rates are artificially low and won’t last forever. They are the equivalent of companies like Tesco offering a boy one get on free offer on some new foodstuff they want to promote. This low cost is being subsidised or paid for by other means, and is not, necessarily, sustainable in the long term.

But in the meantime let’s consider that the cheap rates you’re getting are an enticement to charge at home. But - like many financial benefits of going electric - once the early adopters have been replaced with the mass adopters, these benefits will decrease.

It happened with the plug-in car grant (although that’s been brought back in a slightly different way recently). It happened with zero VED. It happened with congestion charging exemptions.

It will happen with cheap overnight charging - not least because once EVs become the dominant mode of transport in the UK and all charge overnight, electricity usage will start to peak overnight instead of during the day.

Which means - for the purposes of this exercise - the amount you pay for your electricity should be considered to be the unit std rate NOT the off-peak rate. For me that’s about 27.5p/kWh before VAT at 5% (and the VAT is important. We’ll come back to it later).

There’s a quick exercise you can do - and I talked, briefly, about this last season in the Q and A Episode.

I calculated how many kWh per year I charge at home and I also calculated the annual costs for running my house - for many people these include mortgage, council tax, bills that are necessary for actually running the house (not including charging the car): so, heating, water, electricity, maintenance etc.

I also added the amortised cost of the Zappi charger I had installed, over a life of 5 years. This is because something in a fast-moving sector such as smart charging has a limited lifespan. Whether you use it for longer than that or not, 5 years seems like an appropriate length of time to offset the cost of the charger. You could opt to do so over 3 years if you wish, for example.

I then divided the energy I used for charging into the overall costs for providing that charge and added the peak rate for my electricity onto that, thereby calculating the cost per kWh for quote unquote ‘cheap’ home charging.

Phew!

Here’s how that works in practice:

Let’s say I charge: 2500

Let me take an imaginary EV owner who lives in a house that has no mortgage or rent (and I’ll come back to why in a moment). But even with no mortgage or rent there are still costs associated with living in this house.

There’s energy costs for heating and running the house

Water costs for the water and sewage

Maintenance costs for repairs and upkeep.

Council tax for bin collections etc.

The cost of the charger amortised over 5 years.

So let’s put some figures on that (and I’m going to put slightly low figures in for reasons that will become obvious)

per month or £: 1800

Water costs - £50 per month or £600 per year

per month or £: 2400

Maintenance costs - £85 per month £1020 per year.

Charger - £200 per year

total these bills add up to £: 6020

gy I charge my car in a year (: 2500

I then add that to the peak rate cost per kWh of, in my case, 26p/kWh to come to an actual cost per kWh for ‘Real home charging. That equates to £2.66 per kWh.

That’s using a home VAT rate of 5%. If the price for home electricity included 20% VAT my costs would rise to £2.69/kWh

That seems like an incredibly high number, right? The irony is that even if you used the 7.5p/kWh rate from Octopus Energy it’s not going to make a great deal of difference to the overall amount. It’s still above £2.45/kW.

I also want to remind you that I have NOT accounted for anything such as mortgage or rental payments which - in an accurate calculation - would also need to be included in here.

AT THIS POINT I WANT TO ADD A CAVEAT HERE BECAUSE PEOPLE ARE GOING TO BE SCREAMING AT ME IS THEY LISTEN TO THIS:

I’m not saying that you, individually, are paying around £2.60/kWh for your home charging, for example. What I am saying is that if you want to compare the price of home charging with the price of public charging, you must compare them on a like-for-like basis. This means doing exactly what the CPOs do and include the costs of installation, maintenance, support etc.

Many people do a simple comparison. ”My cheap energy tariff is this, the price CPOs charge for providing a complete infrastructure build is that”, and say ‘The difference is huge!’ But it’s not a like for like comparison.

It’s like comparing the price of a cup of coffee made at home with a Starbucks coffee. It’s always going to be cheaper at home because you never include the same things. Do you have the big Gaggia coffee maker at home? Is the price of that included in your home coffee calculation? What about the grinder? Do you include the cost of electricity to heat the water? Do you include the cost of the milk? Of course you don’t. You say ‘I pay £10 for a bag of coffee. I can get 100 cups from that bag so my price per cup is 10p’

For a home owner there are sunken costs that you need to pay regardless of whether you charge a car at home or not. But for a CPO these additional costs are key factors that play into the pricing equation. For an accurate comparison you have to include them.

CAVEAT OVER.

I would encourage you to do a similar calculation for your house including your actual mortgage or rent payment to determine what the full real-life cost of your home charging is.

It’s most certainly NOT going to come to the 76p/kWh that Zapmap calculate as an average for public rapid charging. But it’s certainly going to be a lot more than 1/10th the price people think it is when they quote the 7p/kWh figure for home charging.

When we talk about calculations like this it’s also worth remembering that utilisation is key.

earlier that I charge around: 2500

earlier that I charge around: 2500

CPOs are always telling us that increased utilisation will equate to decreased costs, that’s why.

The ‘fixed costs’ such as rental, maintenance and support are going to be divided across a larger number of kWhs.

Are there going to be people who can look at these figures and say ‘But those figures don’t hold up for me’? Or “I have solar so the figures are different in my case”. Absolutely, yes there are.

But that doesn’t mean the calculation is wrong, merely that it doesn’t apply in your case. Remember this isn’t a calculation mean to show true charging costs, it’s meant to highlight the calculation basis for comparison costs between private and public charging.

There are also others - and I can hear Abigail Dombey from Brighton screaming ‘I have to pay those same costs for my house in Brighton and I’m still paying over-the-odds for charging because I don’t have off-street parking.’. She is, of course, correct. But even doing the calculation I’ve included above with bills excluding the mortgage it’s worth remembering that this cost/kWh is substantially higher than street charging and that’s without the cost of a Brighton rent or mortgage.

Remember the cheap overnight rates we are paying at the moment are subsidised in some way, shape, or form, by the energy companies.

For the proportion of EV drivers that form part of the Octopus Energy customer base this is something they can afford to manage. But if every one of Octopuses’ almost 7 million customers switches to EV and gets a cheap overnight tariff I would be VERY surprised if this rate remained at 7.5p/Kw.

As I mentioned earlier, I don’t believe OVO Energy can support 24/7 EV charging at home at 7p/kWh once their customer base increases.

For both OVO and Octopus Energy, there will be times during the year when this tariff will work for them. There will also be times when it won’t. The question is how long before they have to change the tariffs?

For this reason I think that it is not a useful comparison to look at 7p/kWh for home charging vs 76p/kWh for public rapid charging and compare on that basis. The better calculation is to compare the full cost of charging at home on your day rate with the cost of public charging. Whilst you will be able to take advantage of the cheaper charging in the short term, it’s not going to last.

Just like zero VED, just like the Plug In Charge Grant, Just like the London Congestion charge exemption for EVs: these things will go away.

Be ready for it.

Did these numbers surprise you? Do you contest these numbers? Let me know: info@evmusings.com

It's time for a cool ev or renewable thing to share with you listeners.

A Swedish crew successfully piloted an electric boat from Spain to North Africa, marking the first intercontinental journey by an electric vessel. The Candela C-8 foiled boat completed the trip quickly while using significantly less energy and cutting emissions compared to traditional ferries. This achievement demonstrates the potential for sustainable and efficient transport across the Mediterranean.

It went from Sotogrande, Spain, to Ceuta, North Africa - a 24-nautical mile trip - in just over one hour, matching the speed of conventional fast ferries. After recharging, the vessel returned to the Spanish mainland the same day.

Love this. Electric ferries.

I hope you enjoyed listening to today’s show.

If you have any thoughts, comments, criticisms or other general messages to pass on to me I can be reached at info@EVMusings.com

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