Get Incentives for EV Charging from Carbon Credits: Network Operator or Site Host

Determine if you want to be a Network Operator or a Site Host for EV charging in Canada

By Ernest Yap

The Canadian federal government is introducing new incentives for EV charging installations to encourage people and businesses to switch to electric vehicles. Clean fuel carbon credits are market-driven incentives available to network operators and site hosts who are involved in the installation and management of EV charging stations across Canada.

As opposed to grants and rebates that may come from taxpayers, clean fuel credits are generated by EV charging stations and sold to fossil fuel producers who are regulated to purchase carbon offset credits for emissions. This way, emitters are mandated to fund the clean energy transition, and if carbon prices rise, they will be incentivized to reduce their carbon footprint.

For the new Canada CFR credits, only network operators and site hosts can generate clean fuel credits. As defined by the Canadian Clean Fuel Regulation, let’s take a closer look at the differences between these two groups, and how they can take advantage of these incentives for EV charger installation.

Note for BC charging stations: There are two types of clean fuel credits that you can generate: Canada CFR and BC LCFS. This article refers to Canada CFR credits only. The BC LCFS credit system does not differentiate between a network operator or site host.

How to spend your incentives for EV charging depends on your role

It’s important to figure out if you want to be network operator or site host. Your role determines how you must spend revenue earned from the sale of your clean fuel credits in Canada.

If you are a site host, there are no revenue restrictions as a return on your investment. Note: residential homeowners do not qualify to be site hosts.

If you are a network operator, you must spend the revenue from the sale of Clean Fuel credits within two years (730 days) of the credit sale by expanding your electric vehicle charging infrastructure; and/or by providing financial incentives to purchase or operate an electric vehicle.

Network operators

A network operator for EV charging is responsible for the management and operation of a network of charging stations (chargers). For the purpose of CFR credits, they operate the network that collects data on the electricity supplied by a charging station and own that data.

The network operator might own or lease the charging stations.

The network operator is responsible for:

Managing charging station data and usage information; owner of that data.
Installing and maintaining charging equipment: they might own or lease the stations.
Ensuring that the charging network is reliable and accessible.
Providing user support and a positive user experience.

Site hosts

A site host for EV charging is responsible for the physical location of a charging station and the infrastructure necessary to support it. For CFR credits, the site host owns or leases the property, may own or lease the charging stations, and have the legal right to have the charging station installed.

The site host has/is responsible for:

The legal right to have EV charging stations installed at a specific location.
Ownership or is leasing the charging stations.
Providing electrical infrastructure to connect the charging station to the power grid.
Maintaining the charging station and ensuring that it is in good working order.

Site hosts do not manage charging station data and usage information; they do not own the data.

Collaboration between network operators and site hosts

To build a successful EV charging network, it’s essential that network operators and site hosts work together in close collaboration. The success of an EV charging network depends on close collaboration and partnership between network operators and site hosts.

As a network operator, you might work with site hosts to identify new locations for charging stations or to integrate charging stations into existing infrastructure. You might also work with site hosts to ensure that the charging stations are properly maintained and serviced, and that any issues are quickly resolved.

As a site host, you might work with network operators to ensure that the charging stations are properly integrated into the power grid and that they meet the needs of EV drivers in your area. You might also work with network operators to provide data and feedback that can help to improve the overall performance of the charging network.

Who gets to claim the incentives for EV charging from clean fuel credits?

Claiming credits is based on a per-site arrangement. A business can be a network operator for one site and a site host for another site.

Ownership of the clean fuel credits depends on the contract terms between the network operator and the site host for each charge site, since only one party can claim them.

If you can be a network operator or a site host, what should you be?

The number of credits you can generate is based on the energy supplied to EVs. This means, aggregation and total energy supplied across one or multiple sites generates the highest amount revenue with lower fees.

This is where creative business solutions can be made to benefit both network operators and sites hosts. The revenue can be used for financing, revenue share, discounting and other business arrangements. Here are a couple of use cases.

When to be a network operator:

Note: Network operations needs to spend the money they earn from clean fuel credits within two years of a credit sale, through infrastructure expansion or by providing incentives to purchase EVs. Rewatt helps customers sell credits at least once per year.

You build public EV charge sites across a region. You will use revenue from credits to accelerate your expansion.
You are a charger installer for condominium buildings and want to aggregate across multiple buildings to generate meaningful revenue from credits due to low volume charging by residents. You would use the revenue from credits as a sales tool to persuade or finance the build of EV infrastructure because residential customers are price conscious.
You are a charger installer for residential homes and you want to aggregate across these sites. You made an arrangement where you operate and maintain the charger as part of a network, and the homeowner does not own the charger station data.
You are a charger installer for commercial businesses, such as chain hotels, supermarkets, commercial and residential properties, and chain stores. This customer does not want the hassle to manage chargers; they may consider a revenue share arrangement with you. On the flip side, this large customer may have the volume and leverage to be the site hosts and earns revenue from credits.
You are a charger installer and operator for large fleets where significant electrical upgrades are required to support the large EV infrastructure. These businesses do not want the hassle to manage chargers; they may consider a credit revenue share arrangement with you. On the flip side, this customer may want to be the site hosts that earns credits.

When to be a site host:

You are a private fleet operator who manages your own charger station and usage data. You maintain your own charging equipment. Your electric vehicles are charged daily due to high usage. You may even have multiple depots.
You are a site host for a public or private space. You maintain your own charger stations and charger and usage data. You did not transfer ownership of your clean fuel credits (or environmental attributes) for any incentive.
You are a site host who does not manage your charger infrastructure, but you want to earn revenue from clean fuel credits.
Important note: residential homeowners cannot be site hosts.

You can understand why ownership of the clean fuel credits needs to be clear in the contract between a network operator and site host.

How much revenue can you generate from clean fuel credits?

We estimated how much you can earn by province. Here’s what we have so far.

Both network operators and site hosts play crucial roles in building and maintaining a robust and reliable EV charging infrastructure in Canada. By working together in close collaboration and partnership, we can help to create a sustainable and accessible transportation system for all Canadians.