Your new electric vehicle (EV) helps you save on fuel costs, but wouldn't it be great to save on the energy it uses, too?
Installing a new EV charging station at your home may be your best bet for making that a reality. Public charging stations can cost two to three times more than charging at home, and home EV charging stations have been found to be no more energy intensive than a typical heater or AC unit.
While the savings opportunity may be clear, navigating the purchase and installation process — and picking up all available federal and local tax credits along the way — may not be. We'll walk you through the process and outline the savings opportunities that may be available to you as you explore home charging.
How Much Does it Cost to Install a Home EV Charging Station?
While home charging stations are generally cheaper to use, the true costs of installation will vary. EV chargers are categorized by three levels, each with a different charging capacity that will affect costs:
Level 1: This is likely the basic charger you received when you purchased your EV. They plug into standard 120 V outlets, come with a capacity of 1.9 kW and enable you to fully charge your battery in 32 hours.
Level 2: Moving up now. Level 2 chargers connect to a 240 V unit with a 19.2 kW capacity, which should allow you to charge your vehicle about five to seven times faster.
Level 3: The fastest — and most expensive — Level 3 chargers charge your vehicle in 30 minutes — though you could pay over $50,000 in installation costs for the privilege.
Assuming you already have a Level 1 charger and are looking to upgrade, Level 2 chargers are priced lower than Level 3, while still providing a decent price/performance ratio. If you're thinking about installing a Level 2 charger, plan for a cost range of about $1,200 to $2,500.
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Electric Vehicle Charging Station Tax Credit (Code § 30C)
You'll save plenty of money by no longer requiring gas, but installing a new charger is still a sizable investment to make all at once. Fortunately, The 2022 Inflation Reduction Act (IRA) extended the EV charging station tax credit (Code § 30C), which means homeowners can potentially save when installing vehicle chargers on their property.
As of January 1, 2023, installing fueling equipment for alternative fuel vehicles — including natural gas, propane, hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel — can earn homeowners a tax credit of 30% of the cost of the installation project or six percent of the project cost (in the event that the property is subject to depreciation), with a maximum limit of $1,000.
Determining if You Qualify for the EV Charging Station Tax Credit
A thousand dollars is nothing to sneeze at — though do note that associated costs, such as permitting and inspection fees, aren't included in total expenses. There are certain limitations. The first, and potentially biggest, is that your home must reside in an "eligible census tract.” According to the Department of Housing and Urban Development (HUD), that's an area where 50% of households have incomes below 60% of the area gross median income (AGMI).
IRS Form 8911, which outlines the tax credit qualifications and filing procedure, notes that eligible census tracts must also reside outside urban areas in addition to meeting the income qualifications. Browse this list of qualified nonmetropolitan census tracts from the HUD archives to see if your area meets the location requirements.
If you do, then it won't take much else to meet the eligibility requirements. Mainly, the charging station must be a permanent fixture at your home (not something removable like a charging cable). Finally, make sure all your ducks are in a row by verifying that:
You placed the refueling property in service during the tax year in which you are filing.
The original use of the property began with you.
The property isn’t used predominantly outside the United States.
If the property isn’t business/investment-use property, the property must be installed on property used as your main home.
Source: IRS Form 8911
When you file, you'll complete the IRS Form 8911, so make sure you have all receipts available come tax time. Storing your receipts in the Documents section of the Green Door app simplifies document retrieval. The credit will be subtracted from the amount of taxes you owe in the year you purchased and installed your EV charging station.
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Next Steps
If you didn't meet the requirements for Code § 30C, don't worry — there are still other ways you can save, too. Look to the local level to find savings opportunities in your area. Many states and utility providers provide some form of incentives to EV owners, so check out Green Door's Rebates Finder to see what's available near you. The app is free to use and is regularly updated with the latest tax credits and rebates so you never miss out on new ways to save.
When you're ready to move forward with an EV charging station installation, let Green Door be your guide. Log in to Green Door to start exploring EV charging options today.
