September 8, 2022

Creating a Positive ROI for Multifamily EV Charging Stations


6 Min. Read

Electric vehicle (EV) charging can be an attractive amenity for your residents, but it is also a substantial investment requiring close investigation. Multifamily owners must be diligent, exploring the options, and analyzing and documenting their EV charging station costs.

Executive Summary

Building a solid financial plan to recoup the initial investment in EV charging systems and generate revenues is critical to an acceptable return on investment (ROI).

Notably, there are local and federal tax incentives that are key to reducing upfront and ongoing EV charging station costs. Additionally, there are several ways to recover costs and generate revenues by rebilling customers.

Technology, such as smart meters, can help you manage and monitor ongoing energy costs and track customer billings. Moreover, you can reduce your energy costs by installing solar panels and obtaining additional tax credits.

EV charging installations can be complex and costly and making mistakes can be detrimental in both money and reputation. These unnecessary and expensive costs can be avoided with the help of a reliable provider with a proven track record of success.

This article will untangle the complexities for multifamily owners looking to capitalize on the growing EV market.

The EV wave and its meaning to multifamily owners

EV sales are on the upswing in the U.S., with a projected 6 million new EVs shipped in 2022. This follows 94% growth in EV sales in 2021. In California, new EV vehicle registrations rose by 68% in 2021.

Manufacturers are increasingly committed to EVs, with new models introduced regularly.

At the same time, 85% of EV owners charge at home. While this works for homeowners, multifamily owners find charging stations are relatively scarce. Currently, there are only 43,000 such installations in the U.S. Putting this into perspective, the Bipartisan Infrastructure Act recently passed by Congress calls for 500,000 universal installations by 2030.

Compelling consumer economics

EVs make sense for owners, especially in today’s high gasoline price environment. Although gas and electricity costs vary, it is overall significantly cheaper to charge an EV than to fill a gas vehicle.

Assume the following:

  • A national average cost per kilowatt-hour (kWh) of electricity of $0.14
  • An average of 14,200 annual miles driven (1183 miles per month)
  • Mileage of 3-4 miles per kWh

The driver will use around 394 kWh per month, which equates to approximately $55 (394 x $0.14).

For gasoline vehicles, assume the following:

  • Mixed 30 miles per gallon mileage
  • $4.25 per gallon cost (lower than as of this writing)
  • 12-gallon tank (360-mile range per fill-up)
  • 1183 miles per month

The driver will need to fill up around 3.28 times per month at $51 per fill-up and pay a total of approximately $167 (3.28 x 4.25 x12).

Thus, the consumer economics are compelling in favor of EVs by a wide margin of almost 70%.

All this drives increased demand for multifamily EV charging such that shortly, they will be an amenity at the least and a competitive requirement at most.

While today’s technology is expensive and better equipment may come in the future, today’s multifamily owners are taking a risk by not providing EV charging for residents now.

So, it makes sense to minimize your EV charging station costs and maximize the ROI in the meantime to at least stay in the game and, at most, to make your location a destination of choice for residents.

Know your costs

Be sure to keep complete and accurate records of installation and operating costs for accurate ROI calculations. Crucially, you will also need those records to claim tax credits and to calculate fees you may charge residents.

The cost to install a Level 2 charger is around $500-$800 for equipment and $799-$1999 for installation. Multiply this by the number of chargers needed.

This does not include architectural changes to make room for charging. In addition, greater numbers of chargers will likely require additional electrical capacity and distribution modifications, as well as utility upgrades. Be sure to work closely with your utility.

One ongoing expense to track is the cost of energy sold (per kWh). Again, be sure to engage with your utility to determine this key cost.

Ongoing maintenance is another cost to include and monitor. Charging stations require periodic maintenance for the reliability your residents will count on.

Maximize your tax credits

These significant incentives offset the cost of equipment and installation and, in some cases, operating costs.

The federal government currently offers a . Note, however, that these credits and incentives may reduce as the market continues to rise.

In addition to federal programs, local and state incentives are also numerous. For example, California offers property owners and managers rebates of $3500 to $6000 per commercial grade Level 2 EV charger in designated counties.

Illinois offers rebates for chargers covering up to 80% of the installation and maintenance costs.

You can check here for more information on your state or city.

Generate revenues

The substantial margin (70% currently) between gasoline and electric fuel previously calculated leaves room to recoup some of your upfronts and operating costs by charging residents. The value-add benefit is based on substantial savings over gasoline, as well as ready accessibility. Remember that this margin will change as gas and electricity costs change.

There are several ways to charge residents:

  • Raise the monthly rent by allocating upfront and ongoing costs, including a markup for overhead and profit, against the number of vehicles in the complex. Consider doing so over the life of the equipment, currently estimated at ten years. Remember that depreciation and tax concessions reduce upfront and operating costs, so use the after-tax costs to determine this amount. Be careful to test your result against a realistic rent figure that the market will bear and that won’t discourage renewing residents and new applicants.
  • Charge a flat fee per month, perhaps based on average mileage and costs similar to those used in the earlier cost analysis of this article but adding in overhead and profit. Be sure that it is logical, clear, and based on stated assumptions. Using explicit variables allows you to reasonably adjust the flat fee up or down with fuel markets.
  • Use pay-as-you-go on a cost-plus overhead and profit basis. This requires POS (point of sale) technology, like that used in gas stations, to bill residents to their credit/debit cards or rent account. This option also allows flexibility for quick adjustments. If your residents have electronic access keys or cards to facilities such as gyms, clubhouses, or gates, consider tying in these technologies to track and charge them individually for their usage.

These are general examples. Consult your finance team for the right approach for your firm.

Use enabling technology

Smart meters are indispensable for keeping track of energy usage costs for each charger. This technology is also viable for smaller communities. Consider it in your plans so you can verify the cost of energy sold in your calculations.

Leverage your investment

Get the biggest return on your new charging infrastructure by converting your gas-powered operating vehicles and fleet to EVs.

Lower your energy costs with solar panels

You can reduce the cost of your energy sold by using solar energy to power your EV chargers. Solar is subject to similar tax credits.

Select a qualified installer

This is perhaps the most important choice you can make, as your installer can make or break your project. Delays can damage your credibility, cost a fortune, and sink your project. Take the time to select the right installer.

Qmerit can help

Multifamily EV charging stations are a great opportunity to increase your properties’ revenues and marketability. But there are risks and complexity that you can mitigate not only by careful planning but also by working with a company with a proven track record of success with EV charging implementation.

Qmerit is that provider. We are the leading installer of EV charging stations in homes and multifamily properties in the U.S. With our long track record and deep experience in EV charging, Qmerit will remain with you from start to finish to untangle all the complexities.

Contact us to navigate your multifamily project to success.


Author: Tom Bowen

Tom Bowen

President, Qmerit Solutions and Commercial Electrification