QSR July 2023

INNOVATION

The pilot program encompasses 60 DC fast chargers at 15 locations and is expected to be completed this summer. Star bucks will evaluate usage rates to decide if it wants to expand the service nationally as part of its broader goal to bolster renewable energy initiatives and cut its carbon footprint in half by 2030. Like Subway and Diversified Restaurant Group, Starbucks is working with its partners to install direct current ( dc ) fast char gers. Those types of chargers are capable of charging an EV to 80 percent in well under an hour. They’re significantly quicker than Level 2 alternating current ( ac ) chargers, the other option that is commonly used in commercial applications, which take several hours to deliver a charge and is better suited for loca tions where drivers will remain parked for longer periods, like office buildings and hotels. “The DC fast charger is the experience that you need for a quick-service restaurant,” says Alex Urist, director of business development at XCharge North America, a provider of smart grid and EV infrastructure solutions. “A Level 2 charger is not going to cut it, because you’re not going to charge nearly enough of your battery. Unless it’s an emergency situation, nobody is going to post up at a fast-food restaurant for three hours.” The biggest hindrance preventing more restaurant opera tors from getting into the EV charging game is electrical service capacity. DC fast chargers typically require inputs of 480 volts and can’t be easily installed on the existing 208-volt service found in most quick-service locations. “It’s not that you can’t get the service upgrade, because you certainly can,” Urist says. “But the cost of that upgrade is prob ably going to be far more than it’s worth and the revenue that you generate.” Volvo and ChargePoint are overseeing the installation of charging stations at Starbucks stores, and they’re managing the complicated task of coordinating with local utilities to establish new electrical infrastructure. Many EV charging stations, like those being built at Diversi fied Restaurant Group’s Taco Bell stores in California, feature solar panels and energy storage solutions that offset demand on the grid. ChargeNet says franchisees don’t need to make any utility service upgrades, except one additional meter needed to support the chargers. In fact, the company says operators can save up to 40 percent on their restaurants’ electricity by con suming the energy produced by the solar panels and stored in the battery system. XCharge North America developed a DC fast charger that can be installed on a restaurant’s existing 208 service, enabling businesses to offer a fast-charging experience without bringing additional power to the site. “Restaurants generally have a buffer on their capacity that would accommodate for at least one if not two chargers, thus making it so that there wouldn’t be significant infrastructure work necessary in order to get these into the ground,” Urist says. “It doesn’t have to be this charging oasis with 12 chargers in one block. I think the way to go about it is to think efficiently about what electrical service we have currently, and just plug a hole and fill a need across a web of assets.” The cost for DC fast-charging hardware in the U.S. ranges

from $28,000 to $140,000 per charger, according to 2019 esti mates from the International Council on Clean Transportation. Depending on charger power and number of installed chargers per site, installation costs span $17,000 to $65,000. An abundance of government incentives significantly low ers the cost of entry for businesses looking to help build up the country’s charging infrastructure. The Biden Administration has earmarked billions of dollars to facilitate the installation of public chargers, and tax credits are available to offset 30 per cent of total project fees up to $100,000. Nearly every state and many utilities are encouraging commercial EV charging with rebates and grants, too. ChargeNet Stations’ business model requires no investment from restaurant operators. The partnership with Diversified Restaurant Group leverages funding from several state incen tive programs, so the franchisee pays nothing up front but still takes a cut of the revenue generated from the chargers. Common pricing structures include by kilowatt-hour, by ses sion, by length of time, or through a subscription. There are a number of different pricing models across charging network providers, including pricing for members versus non-members, site-host-specific pricing, and pricing based on rate of charge. There’s also user-specific pricing, like the model used at Star bucks, which offers free charging for Volvo drivers. “The profitability question is one thing I’ve really wrestled with as we advise our clients on some of these issues,” Risner says. “It’s not difficult to see that in the very near future, some businesses will likely see an advantage of pulling customers to use the goods or services they were originally providing by allowing people to use the EV chargers for free.” Today’s EV drivers may not push back on paying for the con venience of charging their car while filling up on a sandwich or a burrito, but there’s no guarantee that won’t change as more brands get into the EV charging game. More than a quarter of public charging already is free to use, according to the U.S. Department of Energy. “Your profitability analysis shifts if it becomes a business value add-on,” Risner says. “I’m not hearing a lot of that con versation right now, but I really think it’s one that needs to be had. Are we going to be switching to an environment where most EV chargers don’t cost anything? That’s going to force you to reevaluate how profitable it is for your business.” From car models to charging equipment to consumer expec tations around the experience of being an EV driver, the wheels of change are turning fast. Risner says that creates both oppor tunities and challenges for restaurants looking to play a part in the green revolution. “Whether it’s the lease for the equipment itself, your fran chise agreements, the pricing structure, or whatever contractual relationships you have, make sure they account for the fact that this transition is going to develop quickly,” Risner says. “You’ll have to be willing to adapt as the space continues to develop, but I don’t know if that’s a reason to stay out of it, because then you may miss out on the opportunity.”

Sam Danley is the associate editor of QSR . He can be reached at sdanley@wthwmedia.com .

30

JULY 2023 | QSR | www.qsrmagazine.com