Why a DC fast charger can be cheaper than home charging
There's a DCFC near me that charges $0.21/kWh before 2pm — less than the $0.35 it costs to charge overnight at home. That might sound strange, but it's not a subsidy. It's a quirk of how commercial energy rates are structured.
How can a DC fast charger be cheaper than home charging? There's a DCFC near me that charges $0.21/kWh before 2pm—less than the $0.35 it costs to charge overnight at home. That might sound strange, but it's not a subsidy. It's a quirk of how commercial energy rates are structured 🧵
Unlike home rates, commercial rates depend not just on total energy but also your highest short-term usage. These "demand charges" are based on your top 15 minutes of the month and can make up over half the bill. In return, the per-kWh rates are much lower.
In PG&E territory, my home rate (EV-2A) is $0.35/kWh off-peak. Commercial BEV1 (under 100kW) and BEV2 (over 100kW) rates are about $0.16/kWh off-peak, but come with demand charges: $1.24/kW for L2 and $1.91/kW for L3.
For a 7.2kW L2, that adds up to about $9/month. For a 150kW DCFC, it's $286/month. But at night, those demand charges are effectively $0 because the peak usage typically happens during the day. Any kWh sold overnight helps offset daytime peaks.
That means you could charge $0.25/kWh—10¢ cheaper than home overnight—and still make a profit. For a well-used DCFC, especially one next to a business that earns from foot traffic, it makes financial sense. By contrast, an L2 at an apartment that's only used every few days might rack up >$0.10/kWh in hidden demand charges that need to be added into the price drivers pay.
The discount might be even starker if a charger happens to be on a commercial rate like B-19 (for example because it shares a meter with a big box store). Off-peak power can be as cheap as 3.8¢/kWh in winter and not even in the middle of the night - in that case it's from 9am - 2pm. The tradeoff is steep peak demand charges—up to $75/kW in summer—but that's exactly when offering cheap off-peak charging helps spread those costs out.
So when you see public DCFC that seems to cheap to be true, it's not crazy. It's smart math. Don't feel bad about plugging in. You're not making anyone lose money, if anything you're helping make that charger affordable for everyone.