Can an electric car lower your electricity bill? We analyse how it is possible

At first glance it seems contradictory, but on closer inspection it makes more sense. Electric vehicle users (EV) enjoy countless advantages —along with a few drawbacks— simply by owning an EV. One of the first, and the focus of this article, is the possibility of seeing the price per kWh of their energy consumption drop dramatically. How is this possible? Let us see.

If we ask any motorist about the price of a litre of fuel for their car, they probably won’t be able to answer with absolute certainty, but they will surely know which of the petrol stations nearest their home is the cheapest. Consumers know that fuel prices are constantly fluctuating, which is why it is difficult for them to pin down the exact price of a litre. But repeated purchases have led them to compare the different suppliers within their reach; comparisons that have given them a clear idea of which one sells fuel at the lowest price.

Switching electricity supplier: easy, simple and at no extra cost

The energy market works in exactly the same way. There are numerous suppliers within the customer’s reach, many more than they themselves know of or are able to identify, that can supply the kWh their home needs. However, the energy market is the least understood by the vast majority of Spanish consumers of all the markets they use regularly in their day-to-day lives.

Contrary to what many believe, switching electricity supplier is possible and carries no extra costs. Traditionally, consumers signed up for electricity with a single company which then, for as long as they lived in that home, supplied the electricity. Today things have changed. The consumer can switch supplier whenever they want, at no extra cost, just as they do with their mobile phone company, looking for the most competitive prices and services that suit their interests.

Nevertheless, the great majority of consumers do not switch companies and remain “loyal” to their traditional supplier, thereby missing out on significant reductions in the price they pay for the energy they use.

How much does a kWh cost? Most people don’t know, but they do know the price of a litre of fuel

Most users do not know what a unit of electricity costs. They don’t know even approximately, yet they know with certainty, or very roughly, the price of the litre of fuel their car consumes. They are even able to establish a range of minimum and maximum prices for a litre of fuel at the petrol stations nearest their home.

By default, most consumers continue to pay the highest tariffs for the electricity they use. They do so simply because they have not devoted enough time to analysing and weighing up the available suppliers and finding the cheapest one. This happens in Spain as well as in other neighbouring countries where the electricity sector is also liberalised. In the United Kingdom, for example, two thirds of consumers are still in this same situation, paying dearly for a product they could get more cheaply.

The arrival of EVs could completely change this situation. Daily use of an EV will make consumers pay more attention to the unit price of the kilowatt-hour than they usually do. That greater awareness will not only lead to better use and optimisation of their energy consumption, but will also drive customers to obtain their energy at the lowest possible price, and to switch both supplier and tariff type to secure their supply.

By taking advantage of the greater competition in the market, the consumer will push the various companies to strive to offer better prices and higher quality services, which in the long run will bring the unit price of the kilowatt-hour down. In this way, even though the electricity bill they must pay will be higher due to the greater consumption caused by using an electric car, the truth is that they will be buying kilowatt-hours at a lower price than before.

But there is more. The most modern electric vehicles can act as energy storage units , working as storage batteries for energy in the consumer’s own home. Through modern intelligent automated systems, the vehicle can charge its batteries at the times when the price of the kilowatt is lowest, which will also reduce the cost we pay for energy. Moreover, given that the car spends about 90 per cent of its time parked and unused, the energy stored in the car’s batteries can be used to power the home’s various electrical systems, thereby generating significant savings on consumption.

And of course, with the use of electric vehicles consumers will completely change their interest in the contents of the electricity bill (the small print) rather than just the total (the final overall price to pay each month). Monitoring their car’s consumption will lead them to pay more attention to the unit price of the kilowatt and to look for the best offer or method of purchasing energy. For example, there are already residential communities that go directly to energy auctions to buy large quantities and, in this way, reduce their purchasing costs and stabilise the price they pay over long periods of time.

In short, although the overall electricity bill rises, the use of electric vehicles will reduce its cost, since the price of the kilowatt-hour in our home will drop considerably, not only for the electricity our car consumes but for all the electricity we use at home. This saving must also be added to the significant reduction from no longer using petrol or diesel in our car.

The price of the kilowatt-hour ranges from €0.075453 to €0.159068 on time-of-use tariffs, and from €0.122 to €0.115 on flat tariffs. Every 100 km, an electric car consumes around 13.3 kWh, which means an approximate cost of €1.094 if we charge it with the Electric Vehicle Tariff that several companies already offer. Charging on standard tariffs, the cost of the energy would range between €1.6 and €2.2 per 100 km. In a diesel car with an average consumption of 5 litres per 100 km, the average cost would be €6.15. If we take into account that the average annual mileage of a driver in Spain is around 15,000 km, the saving an electric vehicle would generate compared with a diesel vehicle would be more than €600 per year.