In an era where sustainability intertwines with economic development, the rise of electric vehicles (EVs) signifies a significant shift in our governments’ policy objectives, our economy, including Michigan’s automotive industry, and our transportation methods. Central to this movement is the infrastructure that supports EVs: charging stations. For Michigan landowners, the embrace of EV infrastructure is not just vital to enabling the shift toward more EVs on our roads—but also a business opportunity. However, as with any burgeoning industry, challenges arise. Let’s explore the benefits, pitfalls, financial incentives, and legal complexities tied to setting up EV charging stations on their property.
Benefits and Pitfalls of Electric Vehicle Charging Stations on Your Property
As electric vehicles continue to gain momentum, the need for charging stations becomes paramount. For landowners, this presents an opportunity.
Investing in EV charging infrastructure can be more than just an eco-friendly gesture; it can be a strategic financial decision. When a driver stops to recharge on your property, there’s potential revenue from charging fees, attracting potential clientele for nearby services, and boosting business if you operate in retail or hospitality.
However, it’s important to keep in mind that entering this space requires capital. The initial outlay can be hefty, given the cost of the latest charging technology and installation fees. Fortunately, for landowners who are interested in installing charger stations, Michigan and the federal government have made incentives available to offset some of the cost.
Incentives for EV Charging Stations
As Michigan’s roadways see a growing number of electric vehicles, the state has recognized the importance of supporting landowners willing to invest in EV growth. The Charge Up Michigan program exemplifies this commitment. Arising from the funds Michigan received in the Volkswagen diesel emissions settlement, the program has earmarked $9.7 million to support the installation of EV charging stations.
The program is available to public or private organizations that can host publicly accessible charging stations. The initiative offers potential grants – covering up to a third of equipment costs or as much as $70,000 per station location. The state mandates that parties who want to take advantage of available incentives pair up with the electric utility overseeing the area, ensuring that the installation aligns with the broader electrical and infrastructural needs of the community. Also, grant awards are distributed on a reimbursement basis only, meaning grantees must pay project costs in full prior to receiving funds.
On a national level, the Inflation Reduction Act of 2022 also provides incentives for EV charging station installation. Starting January 2023, tax credits of up to 30% per charger became available pursuant to Section 30C of the U.S. Income Tax Code (referred to as the “Alternative Fuel Vehicle Refueling Property Credit”). This not only covers the charger itself but also accounts for the infrastructure upgrades and installation, with benefits maxing out at $100,000.
As with all grant and tax incentive programs, the devil is in the details. So it’s important to work with advisors to understand whether a project is eligible for incentives, and what’s required to access them. However, with these types of programs available, the financial burdens of investing in EV charging infrastructure are lightened.
But as with all opportunities, there are additional considerations complexities beyond the financial investment to be mindful of—especially when considering the legal and contractual intricacies of such ventures.
Legal and Business Considerations for Landowners
While financial incentives and the broader vision of green transportation make EV charging stations attractive, they come with their share of legal and business challenges. Landowners need to be well-prepared and informed about these challenges.
Navigating contracts is a top priority. Whether it’s an agreement with utility providers, or third-party service providers for installation and maintenance, each clause matters. It’s not just about setting up the station—it’s about the long-term responsibilities and rights attached to it. Ensuring clear terms around maintenance, liability, and service expectations can prevent unforeseen disputes and costs in the future.
It’s also critical to understand and abide by local zoning and land-use regulations. Every municipality may have its nuanced requirements, and it’s imperative to ensure that installing an EV charging station aligns with these rules. Acquiring the necessary permits, understanding any restrictions, and anticipating future regulatory changes can be the difference between a thriving station and one that faces roadblocks.
(You can learn more about contractual, zoning and land use issues related to EV charging stations in our previous blog post on the topic.)
As with any industry, the landscape of EV charging stations will evolve. Staying agile and ready to adapt to changes, from technological upgrades to new regulations, will be key. Collaborating with legal counsel and industry experts isn’t just about navigating current challenges—it’s about ensuring continued success in the electric age.
Conclusion
Michigan, like much of the world, is at an inflection point—transitioning from traditional vehicles to a more sustainable, electric future. For the entrepreneurial landowner, this shift presents both opportunities and challenges. The potential financial rewards are real, but they come tethered to intricate details and considerations. Being well-informed, seeking expert advice, and carefully planning each step can transform this venture from a mere idea into a thriving, future-proof investment. As Michigan drives into the electric future, its landowners have the chance to be at the heart of this change.
