As CRE investors and stakeholders continue to pursue sustainability and decarbonization efforts to support their ESG policies, one effort should not be overlooked when assessing the overall efficiency of a property. The installation of electric vehicle (EV) charging stations on commercial real estate properties has multiple benefits, not only contributing to a company’s ESG goals, but also helping to increase property value by attracting and retaining tenants and customers as more people switch to EVs. With currently available national and state incentives for installing EV charging infrastructure, this is an ideal time to consider adding it to your properties.
EV Charging’s Impact on ESG Reporting
A major goal of ESG is the reduction of overall carbon footprint. As companies review their greenhouse gas (GHG) emissions, transportation is one factor that needs to be considered. As of 2021, transportation is responsible for 28% of GHG emissions by sector in the U.S., according to the EPA, making it the largest contributor of GHG emissions. While CRE stakeholders may often look to the property itself for decarbonization opportunities, the impact of vehicles entering and leaving a site is also part of the property’s carbon footprint. Here, EVs offers a solution for helping to reduce emissions. Installing EV charging on a property supports the use of electric fleet and passenger vehicles, and further reduces carbon footprint when the charging infrastructure is powered by renewable energy sources, such as solar.
Meeting the Market Demand for Electric Vehicles
Market demand is also driving the need to install EV charging. Many forecasts expect an acceleration of EV adoption over the next decade given recent greater vehicle choice, improved battery capacity, reduced costs, government policies, and auto maker targets. S&P Global Mobility data shows that current charging infrastructure in the US is not nearly robust enough to fully support a maturing EV market. Even when home-charging is taken into account, the US will need to see the number of EV chargers grow more than eight-fold by 2030 to properly match forecasted EV sales demand. With this current shortfall of EV charging stations, CRE owners have an opportunity to make up the difference and help meet the increasing demand, and in the process, future-proof their properties for the EV transition.
EV Charging for Diverse Property Types
Most commercial property types make sense for installing EV charging. The addition of EV charging helps to attract and retain tenants with their own decarbonization or ESG goals, and attracts customers and employees who are environmental stewards and have opted to drive EVs. One dual benefit for tenants and customers is that EV drivers often spend more time shopping at a retail establishment while they wait for their vehicle to complete charging.
Properties to consider for EV charging include but are not limited to:
- Shopping and strip malls
- Standalone retail stores
- Office buildings
- Medical centers
- Car dealerships
- Multifamily housing
- Public parking structures
Meeting Regulatory Policies
Regulations also increase the need for EV charging. In California, New York, Massachusetts, New Jersey, Oregon, and Washington policies have been passed which stop sales of new gas-powered vehicles after 2035. And in the Southern California area, the Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program drives a need for EV charging at warehouses in the South Coast Air Quality Management District. Warehouse operators in the district are required to pay mitigation fees if actions supporting reduced emissions, such as EV charging installation, are not completed. Installing EV charging infrastructure now will help property owners comply with regulatory policies like these that are either already in place or may be passed in the future.
Additional Benefits of EV Charging Infrastructure
In addition to meeting ESG goals, market demand, and regulations, offering EV charging as an option helps to differentiate it from properties without, attracting EV drivers and potentially increasing lease renewals for office and industrial properties, as well as multifamily housing. Charging stations also create an additional revenue stream from fees charged for energy usage. These factors can help increase rental pricing and thus property value in the long term.
For property owners looking to install EV charging who do not know where to start, an independent EV charging consultant can help you understand a site’s electrical capacity for chargers, the install process, costs, renewable energy feasibility, and other considerations such as available government incentives to help fund the project. An independent consultant will guide you toward a custom solution that is fiscally responsible and fits your organization’s decarbonization goals.