How Solar Offsets EV Costs for Car Dealerships

Car dealerships are perpetually looking out for strategies to reduce overhead costs and boost profitability in the highly dynamic and competitive landscape of automotive sales. The emergence of electric vehicles (EVs) and the requisite charging infrastructure introduce a new set of challenges in the form of escalating energy consumption and thereby, operating costs. However, on-site solar has emerged as a straightforward solution to these challenges. New Columbia Solar is able to offer solar that offsets EV costs while helping dealerships reduce their already substantial electricity costs without any capital expenditure.

The Energy Conundrum in Car Dealerships: Understanding the Costs

Car dealerships, by virtue of their unique operational characteristics, consume approximately 18% more energy than conventional office spaces according to the National Automotive Dealers Association (NADA). This elevated energy consumption can be attributed to several dealership-specific factors:

• The extensive parking lot and interior lighting systems that ensure vehicles are attractively displayed around the clock.
• The auto service and repair operations that requires the use of energy-intensive equipment.
• The presence of on-site amenities such as car washes that further contribute to the overall power demand.

Energy costs typically represent the third highest overhead expense for car dealerships. The advent of EVs has compounded this problem, with the integration of on-site charging stations — a critical adaptation in today’s market — leading to a significant surge in energy usage.

Maximizing Unused Space: The Benefits of Solar Installations at Dealership Sites

Car dealerships are uniquely positioned to reap the benefits of solar due to their structural features:

• Roofs: The majority of dealership buildings boast large, flat roofs that are ideally suited for harnessing solar power. The installation process is straightforward and therefore executed with minimal disruption to daily operations.
• Carports: These structures serve a dual purpose by protecting inventory and customers from inclement weather while supporting solar panels. They also present an excellent opportunity for integrating built-in EV charging stations or lighting solutions.

Furthermore, these solar installations serve as tangible evidence of a dealership’s commitment to sustainability, a powerful marketing point in today’s eco-conscious consumer market. In fact, solar-equipped dealers report that “Customers are choosing [them] over the competitors” and that the solar facility “is actually gaining [them] customers.”

The Solar Solution: A Financially Savvy and Environmentally Conscious Choice

Transitioning to solar power is more than just an environmentally responsible decision; it’s a financially savvy move. The savings derived from adopting solar technology can be substantial, equating to the profits from selling an additional 2-3 vehicles each month! New Columbia Solar offers two options to install solar onsite with no capital expenditure from the dealership:

• Power Purchase Agreements (PPA): NCS designs, finances, and constructs the system onsite and sells the electricity to the dealership at a sub retail rate – anywhere between 30 to 100% less than the current rate.
• Community Solar Lease: Again NCS designs, finances, and constructs the system but under this arrangement, sells the electricity back to the grid. In exchange for using the roof or parking lot space, NCS pays the dealership a lease similar to a cell tower lease.

Of course there is always the option for the dealership to own the system outright. While this does involve upfront capital expenditure, the system can pay itself off in a matter of years. This is especially true given the energy-intensive nature of car dealerships.

Hedging Against Rising Overhead Associated with EVs

As the adoption of electric vehicles (EVs) continues to rise, car dealerships face the dual cost squeeze, caught between increasing electricity costs and the installation costs of on-site charging infrastructure. Dealers finding themselves required to install EV charging infrastructure by automakers and regulation, are increasingly turning to solar to offset these EV costs.

A solar facility helps lower overhead and lessen the financial blow of transition to EV infrastructure by:

• Mitigating the Costs of EV Charging Stations: Solar panels installed on dealership rooftops or carports generate electricity that powers these charging stations. This not only reduces the dealership’s reliance on grid electricity, but also ensures a steady supply of power for EV charging, even during peak usage times. Energy generated by the solar panels can power various other amenities, leading to substantial savings on utility bills.
• Subsidizing the Cost of Charging Stations: The immediate energy savings from a solar installation can be put toward financing EV charging stations in the near-term future. This is especially true in a PPA or lease agreement, where the solar developer pays for the construction of the system with no capital required from the dealership.
• Financial Incentives and Return on Investment: For dealers opting to own their system outright, investing in solar power also comes with financial incentives such as federal tax credits and accelerated depreciation benefits. These incentives, combined with the savings on energy costs, lead to a quick return on investment. Furthermore, any excess solar power generated can be fed back into the grid, providing an additional source of revenue for the dealership.
• Enhancing Dealership Reputation: In addition to the cost-saving benefits, adopting solar power also enhances a dealership’s reputation. It demonstrates a commitment to highly valued qualities like sustainability and innovation. This is especially true as automobile-adjacent industries come under increasing pressure from environmentally conscious consumers.

As car dealerships grapple with the challenges posed by the increased electricity demands of EVs, adopting a solar solution provides not only a respite from escalating costs but also positions them as progressive leaders in both automotive sales and environmental stewardship within the local community. This forward-thinking approach is key to navigating the evolving landscape of the automotive industry. New Columbia Solar is a proud partner to dealerships pursuing EV charger installation and looking to take advantage of solar’s lucrative potential.