Study author Wally Tyner, a Purdue professor of agricultural economics, says, "People who view the Chevy Volt as green will pay $10,000 more over the lifetime of the car because it's green. Most consumers will look at the numbers and won't pay that."
In tiered pricing systems, consumers pay a higher rate for electricity they use beyond a certain amount. California has three rate tiers. It also has a time-of-use system, which reduces the rate during periods of low demand. In addition, Californians pay some of the highest electricity rates in the United States - an average of 14.42 cents per kilowatt hour - about 35 percent higher than the national average.
"Almost everyone in California reaches the third pricing tier each month. If they add a plug-in hybrid, they are charged the highest rate," said Tyner, whose findings were published in January in the journal "Energy Policy."
Chevy Volt plug-in hybrid parked in Palo Alto, California (Photo by hang_glider pilot)
States with flat electricity rates or those that vary price based on the time of use are more economical.
Tyner worked with Purdue colleagues in agricultural economics and chemical engineering to develop a model that would simulate energy use by Californians and analyzed U.S. Census data to determine types of appliances each household would use. The model closely aligned with actual energy use in California.
Adding a plug-in hybrid increases the average use of electricity nearly 60 percent per household, the scientists found. In California, most of that increase would be charged at the highest rate.
For the simulations, researchers compared the plug-in hybrid Chevrolet Volt with the Toyota Prius and Chevy Cobalt to estimate relative economics of the alternatives. The simulations accounted for the current $7,500 federal rebate to consumers for purchasing plug-in hybrids.
The researchers determined the Volt would be less economical than the Toyota Prius, a hybrid that does not charge its battery through a plug, or the Chevrolet Cobalt, which uses only an internal combustion engine.
When oil prices are high, the Prius would be the most economical, with the advantage going to the Cobalt when oil prices are low.
Tyner said to make the Volt more economical than either the Prius or the Cobalt, oil prices would have to rise to between $171 and $254 per barrel, depending on which electricity pricing system is being used.
That's because the Volt has a higher purchase price and will cost more in electricity than gasoline over the life of the vehicle.
Tyner said electricity costs would have to decrease to allow the plug-in hybrids to compete.
States such as Indiana, which charges a flat rate of about eight cents per kilowatt hour, would be more economical. States that employ time-of-use rates would be the most economical because vehicle owners could charge their cars at night when rates are lowest.
California could change its rate system, suggested Tyner, or issue extra electricity meters for charging cars at flat rates.
In Los Angeles, the Department of Water and Power allows customers to install a time-of-use meter for their EVs that discounts the price of electricity 2.5 cents per kilowatt-hour for night and weekend charging. The city is offering instant online EV home charger permitting approval and expedited charger inspection and meter installation.
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