Dealerships' EV charging cost savings may be found in solar panels

Some auto dealerships are installing solar panels to offset expensive and energy-intensive automaker requirements to build EV chargers on their lots.

Dealerships in sunny locations with large roofs and parking lots may be well-equipped to install solar panels and reduce their energy costs, said auto and energy experts at the New York International Auto Show this week.

"Franchised dealers — and I probably work with about a third of them so far now — are really realizing the electrification of the facility is where the king's gold resides," said Ryan Ferrero, the national director of auto industry electrification at Freedom Solar Inc., a company that works with dealers to install solar panels.

Auto brands including Ford, Cadillac, GMC and Chevrolet require dealers to have various numbers of different levels of EV chargers. Ford Model e Certified Elite dealers, for example, must have six Level 2 chargers and three Level 3 chargers by 2026.

Dealers can spend up to $750,000 installing each faster Level 3 charger, depending on the infrastructure improvements required. They also have to pay for additional electricity to power the charging stations.

Auto dealerships use nearly 20 percent more energy than office buildings, according to the National Automobile Dealers Association. That comes from the power needed to operate compressors, paint booths, vehicle washing and detailing systems, specialty lighting and large bay doors that whip heating and cooling literally out the window.

Utilities such as Con Edison will support dealerships and other businesses that decide to install solar panels, the company said.

"Solar works best when you have a large area. That's why you don't see it taking off tremendously in urban areas," said Joseph Morreale, Con Edison's section manager of EV demo projects and managed charging. "Dealerships could potentially leverage the large show areas that they have outdoors" and their large showroom roofs and put up solar paneling.

The savings can be substantial. A 2020 presentation by the National Auto Dealers Association said that Luther Auto Group in Minneapolis estimated it has saved more than $45,000 annually using its 454-kilowatt rooftop solar panels. Fitzgerald Auto Mall in Gaithersburg, Md., said it has saved about $258,000 in its first year of using solar panels.

Freedom Solar said about 300 franchised dealerships have installed solar panels since 2011, and another 250 will complete installation in 2023.

Dealerships can also take advantage of subsidies and incentives such as the Solar Investment Tax Credit, a federal write-off of at least 30 percent for solar projects that meet certain requirements. Some dealerships can qualify for even greater incentives, depending on their location. 

Con Edison conducts net metering, which measures the difference between energy produced by generators such as solar panels and energy used, so that customers can basically sell electricity back to the grid for credits on their bill. But that practice varies by state — not every local utility is required to buy back surplus energy. In Texas, for example, dealers have to negotiate individual deals.

It's unlikely — though not impossible — that dealerships would generate enough energy to cover their needs and then some to earn credits in the near term, said Morreale.

"In order for it to be net zero, you need to have as much production from the solar as you're consuming at that time," he said. "If you have an air conditioner or a refrigerator running overnight, for example, there's no sun — but you need power."