Car dealerships are facing significant expenses when it comes to installing electric vehicle (EV) charging stations, and many are now looking to solar panels to help mitigate these costs.
To meet the energy demands tied to automaker requirements for EV chargers, some dealerships are integrating solar technology into their operations. Dealerships situated in sunny regions with ample roof and parking space are particularly well-suited for solar installation, according to experts at the recent New York International Auto Show.
“Franchised dealers, of which I work with about a third, are beginning to recognize that electrifying their facilities is where significant savings can be found,” said Ryan Ferrero, national director of auto industry electrification at Freedom Solar Inc., a company assisting dealers in solar panel installation.
Automakers like Ford, Cadillac, GMC, and Chevrolet mandate that their dealerships install various levels of EV chargers. For instance, Ford Model e Certified Elite dealers are required to have six Level 2 chargers and three Level 3 chargers by 2026.
The installation of Level 3 chargers can be particularly costly, with expenses soaring to $750,000 depending on the necessary infrastructure enhancements. In addition to installation, dealerships must also account for the increased electricity costs associated with powering these chargers.
According to the National Automobile Dealers Association, car dealerships consume nearly 20% more energy than typical office buildings. This higher demand comes from powering compressors, paint booths, vehicle washing and detailing systems, specialized lighting, and large bay doors that permit heating and cooling to escape.
Utilities like Con Edison are willing to support dealerships and other businesses in installing solar panels. “Solar is most effective in areas with ample space, which is why it hasn’t gained much traction in urban environments,” said Joseph Morreale, Con Edison’s section manager for EV demo projects and managed charging. “Dealerships can take advantage of their expansive outdoor display areas and large showroom roofs for solar panel installation.”
The potential savings from solar installations can be significant. For example, a presentation from the National Auto Dealers Association in 2020 cited that Luther Auto Group in Minneapolis saved over $45,000 annually with its 454-kilowatt rooftop solar panels. Similarly, Fitzgerald Auto Mall in Gaithersburg, Md., reported savings of approximately $258,000 in its first year of utilizing solar energy.
Since 2011, Freedom Solar has facilitated the installation of solar panels at around 300 franchised dealerships, with another 250 expected to complete their installations by the end of 2023.
Dealerships can also benefit from financial incentives like the Solar Investment Tax Credit, offering a federal tax deduction of at least 30% for qualifying solar projects. Some dealerships may qualify for even higher incentives based on their location.
Con Edison also implements net metering, which allows clients to sell excess energy generated from solar panels back to the grid for bill credits. However, this practice varies by state, as not all local utilities are obligated to purchase surplus energy. In Texas, for example, dealerships must negotiate individual agreements.
While it’s unlikely that dealerships will generate enough energy to fully cover their needs in the short term, Morreale believes they can still benefit from solar installations. “To achieve net-zero energy usage, you’ll need to match your energy production from solar with your consumption during the same period. For example, running an air conditioner at night requires energy when there’s no sunlight available,” he noted.