A study released today, commissioned by fintech lender Plenti and prepared by Accenture, confirms electric vehicles (EVs) are now cost-competitive with internal combustion vehicles over their lifecycle – even when charged exclusively from the grid.
Further, households charging their EV from a home solar-battery system rather than the grid can expect a positive financial return over a 15-year period, with savings of up to $12,000 compared with owning an internal combustion vehicle and using grid energy. These households can also expect to reduce their carbon emissions by more than 80%.
The study, Solar Charged EVs in Australia, makes a compelling case for EV ownership in Australia, projecting that cost-competitiveness of EVs and significant household energy cost savings will lead to $8.9 billion in annual sales of EVs, home solar and battery systems1 by 2026 if strong policy support and sustainable finance are introduced.
Commenting on the release of the study, Plenti CEO Daniel Foggo said: “This is a game-changer for Australian households and our economy at large. As both petrol and energy costs continue to rise, the benefits of solar-charged EVs are now clearer than ever.
“According to our study, most people believe EVs are more expensive over their lifecycle than internal combustion vehicles – especially if they’ll be charging their EV from the grid. This perception remains a key reason why many people are yet to make the switch to electric.
“However, this perception is no longer accurate. Our study reveals that EVs are now cost-competitive with conventional cars over their lifecycle if charged from the grid. Even better, households charging their EV from a home solar-battery system can expect to save up to $12,000 over a 15-year period.
“Switching to an EV is now a no-brainer for most Australians.”
Drawing on a 3,000-respondent survey and other data, Solar-charged EVs in Australia quantifies the benefits of charging an EV from a household solar-battery system, where energy produced by rooftop solar panels is stored in a home battery and used to charge the EV in addition to the house.
Key findings from the study include:
- EVs are now cost-competitive with internal combustion vehicles over 15 years’ ownership when charged with grid power, and are significantly cheaper when coupled with home solar-battery systems;
- Households with an EV and a home solar-battery system can expect an average total electricity bill of ~$230 each year, down from the current average household’s $1892 annual electricity bill where grid power is used (and no EV);
- Non-financial reasons (such as access to charging infrastructure and narrow model choice) were highlighted as key barriers to EV uptake through the customer survey. These are being rapidly addressed – EV models available in Australia are expected to almost double by the end of 2022 and thousands of charging points are in the process of being deployed state governments;
- EV, home solar and battery system ownership can reduce average household emissions by 83% when compared to using an internal combustion vehicle and grid power;
- An $8.9 billion market for EVs and home solar and battery systems could emerge by 2026 if affordability concerns and non-financial barriers are addressed.
“Australia is a global laggard in EV adoption, and reversing this underperformance means addressing consumer misperceptions about the affordability of EVs. Key to this will be communicating the benefits of coupling an EV with a home solar-battery system – and we have a distinct advantage here, as Australia is a worldwide leader in solar-battery system installations.
“It’s not just household budgets that stand to benefit from accelerating Australia’s adoption of EVs. Our study estimates a market for EVs and new energy equipment worth $8.9 billion in just five years’ time. That’s an enormous opportunity for Australia’s economy – and the EV manufacturers, vendors and installers of renewable energy technology, and energy retailers who will benefit from these sales.
“Further, renewable energy systems deliver resource sovereignty and security, providing a bulwark against our increasingly volatile global supply chains.
“Finally, delivering lifetime cost benefits requires good value finance to assist customers with the higher upfront costs of EV ownership. The EV finance solution Plenti launched late last year will speed up the inevitable transformation in Australia’s automotive and renewable energy sector by unlocking access to alternate energy solutions. The benefits will not only be for households and the economy, but clearly for the environment too.
“We will continue delivering innovations that make access to renewable energy solutions easier and more affordable than ever,” said Mr Foggo.
In addition to the suite of EV finance products it launched in late 2021, Plenti now also offers bundled energy finance where householders can pay for their home renewable energy system and usage costs on the same payment plan. Other customer solutions are scheduled to follow during 2022.
Shaun Chau, Accenture Managing Director, ANZ Sustainability Services Lead, said: “The report finds that It makes financial sense to own an EV, and that households can increase their long-term savings by adding a home solar and battery system to an EV purchase.”
“With petrol and diesel prices soaring across Australia, EVs offer an increasingly competitive value proposition when compared to combustion engine vehicles. This is largely driven by the lower fuel costs of EVs.
“Pent-up demand for EVs is high in Australia. However, the biggest barrier to EV adoption is upfront affordability. Australians are paying premium prices for EVs. This is due to a lack of subsidies, supply and range of available models when compared to countries with high EV uptake.
"The outlook for Australia's future EV and home solar and battery system sales depends on the level of policy support available – as well as on the availability of sustainable finance. With stronger policy support, Australia could follow in the footsteps of Europe, China and California to grow its EV market by 6.5 times in the next 5 years to a combined $8.9 billion market for EVs and home solar and battery systems."
Commenting on the purpose of the study, Daniel Foggo said: “We commissioned this study to better understand – and demonstrate – the tangible benefits in making this automotive and energy transition that is already underway elsewhere in the world. It’s inevitably coming our way and Plenti is positioned to help Australian consumers, businesses and the environment benefit immediately and into the future.”
1 $8.9B includes EVs and home solar and battery systems that are purchased with EVs. Home solar and batteries that are not coupled with an EV are excluded.