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.
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.
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:
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:
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.
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.
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.
When to be a site host:
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.