And help push rates down too.
There are many obvious reasons why buying an electric vehicle is beneficial, but a new research study by Synapse Energy Economics has revealed that electric cars are helping push electricity rates down in the US.
The primary appeal of electric vehicles is that they supposedly cut the carbon footprint of their owners. Still, the new study proves that EVs help cut everyone else's utility bills. The study looked at three California utilities that serve households with electric cars, revealing that from 2012 to 2021, EV owners bagged those utility companies $1.7 billion in profit, and here's why that's good for all of us.
Does this mean that electricity providers are making mass profits off of the backs of Tesla drivers?
Quite the opposite is true: these utilities are highly regulated institutions, and laws setting profit caps mean that utilities are forced to return excess profits to their customers in the form of lower rates. This act is called "revenue decoupling" in states such as California.
Although EV users use much more electricity than the average user, the overall cost is still relatively cheap. One reason is that EV drivers tend to charge their vehicles in off-peak periods when utilities can provide energy more cheaply due to additional capacity in the generation, transmission, and distribution sectors.
"Because electric cars don't add a lot of extra capacity costs, because they're primarily charging off-peak, what they're doing is they're more efficiently using the electric grid infrastructure," Melissa Whited, one of the study's authors, said.
If EV owners were to charge during peak periods, this would ultimately place added pressure on the electric network and necessitate further investments in electric infrastructure, but the study reveals that EV owners have been sticking to off-peak times.
Synapse Energy Economics isn't the only research body to come to a similar conclusion regarding EV cost savings: a 2021 report from MJ Bradley & Associates, a consulting firm focused on environmental issues, reported that increased EV usage in the state of Nevada could decrease each household's yearly electricity bill by $123 by 2050. While EV prices continue to fluctuate they are becoming more affordable, and the good news is that it doesn't matter if you drive a Rimac Nevera or a Chevy Bolt; now, there's more proof that driving an EV is good for everyone.