Shifting Electric Vehicle Owners to Off-Peak Charging

Electric vehicle (EV) sales have been rising as a share of new car purchases, and they are expected to continue to do so because a range of public policies support the decarbonization of the transportation sector. The electricity used to charge an EV can be substantial. An average household consumes approximately 1 kilowatt-hours of electricity per hour. An EV charging on a common (level 2) fast charger typically uses 7 to 8 kWh per hour. The impact of greater EV penetration on the cost of electricity and reliability of electricity distribution systems will depend critically on when EVs are charged, as charging during high-demand times could strain the system and necessitate substantial investments in grid infrastructure. Encouraging EV drivers who might charge at high-demand times to shift to other times when there is surplus grid capacity can significantly reduce the cost of EV integration.

In Show Me the Money! Incentives and Nudges to Shift Electric Vehicle Charge Timing (NBER Working Paper 31630), Megan R. Bailey, David P. Brown, Blake C. Shaffer, and Frank A. Wolak use a field experiment to measure the relative effectiveness of financial rewards and behavioral nudges in shifting EV charging to off-peak times.

Households in Calgary, Alberta were recruited from a municipally owned electricity distribution utility. They were randomized into one of three groups: a rewards group that received a financial incentive of 3.5 cents Canadian per kilowatt-hour, roughly a 23 percent discount from their hourly electricity rate, for charging during the off-peak hours from 10 pm to 6 am; a nudge group that received information from the company on the societal benefits of charging in off-peak hours; and a control group that received no intervention. The hourly electricity consumption of all three groups was monitored during the experiment.

Financial incentives were effective at shifting EV charging behavior, with the households receiving the off-peak discount collectively shifting their average share of kWh charged during off-peak hours from 59 to 77 percent. The nudge group showed no change in charging behavior and was statistically indistinguishable from the control group.

To test for habit formation, a randomly selected half of the rewards group was told they would no longer receive financial incentives for off-peak charging while the other half continued to receive the off-peak discounts. The charging behavior of the group that no longer received the subsidy reverted to its pre-intervention pattern. Continued financial incentives were needed to maintain the shifts in charging-time behavior.

The researchers conclude that EV charging behavior is more price-responsive than many other forms of residential electricity use, perhaps because shifting charging times does not sacrifice driving capability. This contrasts with the effect of timing shifts in the use of many residential appliances, such as air conditioners, the use of which must coincide with the electricity draw.

— Susan Stewart

The researchers are grateful to their partner utility, ENMAX Power, for sponsoring and managing this field experiment.