Now that Congress has passed generous new tax credits for the purchase of solar energy and electric vehicles, you may be wondering if now is the time to kick the gasoline habit. The short answer is YES!! There’s never been a better time to fill up your car on sunshine.
But you likely still have some questions about electric vehicles, including:
- Which EVs are eligible for new federal tax credits in 2023?
- How much solar power do they require for battery charging?
- How long does it take to pay back solar investments through gas savings at the pump?
We’ve got answers that you’re going to like!
Which Electric Vehicles Are Eligible for Tax Incentives?
Global electric vehicle sales doubled in 2021 and are on track to reach 13% of all car sales this year – an all-time high. Yet, despite this surging demand, the list of models eligible for new U.S. federal tax credits in 2023 is surprisingly small. That’s because the Inflation Reduction Act sets price limits on available models and requires final assembly in North American auto plants with batteries using domestic content. This limits the field to established U.S. automakers like Ford, GM and Tesla, and upstarts like Rivian. Nissan’s early entry in the EV space – the LEAF – also qualifies because it owns an assembly plant in Smyrna, Tennessee.
Fortunately, more EV models are in the works that will broaden the market for this $7,500 federal tax credit in the days ahead. Used EVs are also eligible for a $4,000 federal tax credit, up to 30% of the vehicle’s purchase price. However, some high-income earners won’t be eligible for these credits, and even buyers of GM and Tesla’s eligible models will have to wait until next year because prior legislation cut off their access to credits after 200,000 units of production. Looking ahead to 2024, all EV buyers will be able to take their new federal tax credit – for new or used vehicles – at the dealership, instead of waiting for a refund in the following tax season. Bear in mind that the size of the credit only matches the tax liability you owe, whether you take it at the dealership or as a refund.
Meanwhile, some approved vehicles like the Ford F-150 Lightning, Cadillac Lyriq, and Rivian R1T are sold out through 2023 and now are taking customer orders for 2024.
With that in mind, here’s the approved list of sedans, pick-up trucks and SUVs eligible for tax credits in 2023, as of October 2022. (Ford and Rivian also have electric transit vans that qualify for these tax credits.)
|Make and Model||Battery size (kWh)||Driving range (miles)||kWh per 100 miles||Annual kWh usage(13,475 mi.)||Estimated load on Tracker|
|Ford F-150 Lightning||98||230||50||6750||71%|
|Ford Mustang Mach-E||76||230||34||4580||48%|
|GM Cadillac Lyriq (2023)||100||310||38||5125||54%|
|GM Chevrolet Bolt (2023)||60||238||25||3400||35%|
|Tesla Model 3 (2023)||82||330||28||3900||41%|
|Tesla Model Y (2023)||82||330||28||3900||41%|
How Much Solar Power Do Electric Vehicles Need?
The answer is it depends. Like cars with small or big engines, electric vehicles are equipped with different-sized batteries that alter the vehicle’s weight and maximum driving range. The Rivian R1T pick-up truck has twice the battery size and one-third more driving range than the Chevy Bolt, for example.
The Ford F-150 Lightning also has extended range models with bigger batteries and more driving range than what’s posted here. It’s also the only model currently eligible for EV tax credits that feature bi-directional charging, which makes it possible to power a house for days without any help from the grid.
Since the average driver travels about 35 miles per day, even a Chevy Bolt or Nissan LEAF has plenty of battery power to get you to and from work and run daily errands. The models with larger batteries can go longer distances, but they still are likely to be “topped off” with charging at home or work, without going deeper into their discharge cycles.
As for charging times, a Level 2 charger using a 240-volt outlet, and delivering 32 amps of service, can provide about 14 miles of driving range per hour of charging. A direct-current fast charger found at some public charging stations can cut the time to recharge a fully depleted battery to less than an hour.
For purposes of this exercise, we’ll assume that all charging takes place at home, using only a Solaflect Tracker as a fuel source. Our Trackers are more than up to the task, and are also far less expensive to use than most public charging stations, which cost up to five times as much to charge. When placed in locations with minimal shade, the latest Tracker models are capable of generating about 10,000 kilowatt-hours of solar generation in a year, equal to 28 kWh per day. Even the largest EV batteries require less daily charging when they become fully depleted.
In the calculations above, we assume 9,500 kWh of annual solar production from our Trackers. In practical terms, that means you would need to tap only 35% of a Tracker’s annual production to charge a Chevy Bolt for a year. For a Ford F-150 Lightning or Rivian R1T, which have much larger batteries, it’s more like 71% of a Tracker’s output, leaving the remaining power to run other household electrical devices or sell into the grid.
How Long Does It Take to Pay Back a Solar Tracker Investment with Gas Savings?
Again, it depends, but in most cases it’s six years or less. Here’s how the math works:
- First, we assume 13,475 miles of driving per year, equal to the national average.
- Then we set the price for gasoline at the current rate of $3.75 per gallon and assume it will increase in price by 3% a year going forward.
- We also set the price for a Tracker’s optimized solar generation at just under 10¢/kWh – after taking into account the new 30% federal investment tax credit – and lock in that rate for the expected 25 year life of a Tracker.
Finally, to calculate the Tracker’s payback period, we compare the amortized cost of a Tracker’s solar generation against the avoided fuel costs of switching to an EV from a comparably sized gas-powered vehicle. In round numbers:
- For a Ford Mustang that gets 24 mpg, the switch to an electric Mach E model yields about $2,100 in annual fuel savings, rising to $2,343 per year after six years of future gasoline price increases. This pays back the 54% load requirement on a Solaflect Tracker in about 5.5 years.
- For a Nissan Versa that gets 35 mpg, the switch to an electric Nissan LEAF yields nearly $1,450 a year in current fuel savings. With gas prices rising at 3% per year, the switch to solar pays back the 38% load requirement on a Tracker in about nine years (owing to the LEAF’s smaller battery size and the high MPG rating of a comparably sized Versa).
- For a Ford F-150 that gets only 21 mpg, the switch to an F-150 Lightning yields more than $2,400 in annual fuel savings initially, rising to more than $18,400 in cumulative savings over seven years of driving. With a larger battery and longer driving range, the Lightning places a 71% load requirement on a Tracker, and the payback is about 6.5 years. The Rivian RIT offers a similar payback profile.
- And for a Tesla Model 3 or Model Y, the switch from a compact gas-powered sedan or SUV that gets 33 mpg yields more than $1,500 in initial avoided fuel costs, with a total payback period of about seven years, based on the formula presented here.
|Make and Model||MPGe rating||Tracker cost to charge battery||Charging cost per mile||Annual charging cost||Annual fuel cost equivalent||Estimated annual fuel cost savings|
|Ford F-150 Lightning||68||$9.55||4.16¢||$561||$2,406 (21 mpg)||$1,845 – 76%|
|Ford Mustang Mach-E||93||$7.41||3.10¢||$418||$2,021(25 mpg)||$1,603 -79%|
|GM Cadillac Lyriq (2023)||82||$9.75||3.15¢||$424||$2,106 (24 mpg)||$1,682 -80%|
|GM Chevrolet Bolt (2023)||120||$5.85||2.46¢||$332||$1,579 (32 mpg)||$1,247 -(79%)|
|Nissan LEAF||111||$4.39||2.93¢||$395||$1,444 (35 mpg)||$1,049 -73%|
|Rivian R1T||70||$13.16||4.18¢||$563||$2,406 (21 mpg)||$1,845 -76%|
|Tesla Model 3 (2023)||132||$8.00||2.42¢||$326||$1,531(33 mpg)||$1,205 -79%|
|Tesla Model Y (2023)||129||$8.00||2.42¢||$326||$1,531(33 mpg)||$1,205 -79%|
More Benefits from Switching to a Solar-powered EV
While these fuel savings start from the day you purchase an EV, the estimated payback period shows how long it will take to pay off the initial investment in solar power before the “free cash” really starts to flow. For example, if you buy a Ford F 150 Lightning, the fuel savings will pay off 71% of the Tracker’s after-tax installed cost in about 6.5 years (as noted above), representing 87,500 miles of accumulated driving. Assuming you own the Lightning for another six years and 168,000 miles of total driving, you will avoid about $36,000 in total fuel costs over the life of the vehicle. With a 3% projected annual increase in gas prices over that period, nearly $20,000 in net fuel savings will accrue to the vehicle’s owner after recovering the Tracker’s initial investment.
Even better, after 12.5 years, your Tracker’s solar panels will still be only halfway through their projected operating life. So, if your next vehicle purchase down the road is another EV – and after 2035 you may have no choice – all of those fuel savings will go straight to your bottom line. And, if you take advantage of battery charging, or bidirectional charging like what’s available in the Ford F-150 Lightning, you can also use the leftover power in your Tracker to run other household electrical devices or sell into the grid – and cut or eliminate your utility bill entirely!
Best of all, these benefits go beyond avoided gasoline and utility bills. Because EVs have much fewer moving parts, they typically have lower maintenance costs than vehicles with internal combustion engines. And because they convert a much higher percentage of energy into propulsion, EVs enjoy a distinct carbon emissions advantage over gas-powered vehicles, even when their batteries are charged with fossil fuels.
Finally, there’s peace of mind in knowing that you will have taken care of one of the biggest headaches in your household energy budget – without having to worry about future government policies or geopolitical events that could cause these energy bills to go even higher. And as our grid grows older and more vulnerable to climate change and cyber-attacks, you can feel safe knowing that your home will be able to keep operating on solar power even when the grid goes down, now that new battery and inverter systems enable this type of grid-independent home energy management.
If you have questions about charging your home or EV with solar power, contact us! Solaflect Energy is your home energy management partner. We help you install clean and affordable solar electricity and home battery systems for a more resilient and climate-friendly future. Check out our website for more information, or email us , or call (802) 649-3700.