Inside Clean Energy: Here Are the States Where You Save the Most on Fuel by Choosing an EV

Savings can range from a high of about $800 per year in Nevada to a low of about $300 in Massachusetts.

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Cost savings for electric vehicles are based on many factors, like electricity prices and gasoline prices. Credit: Matthew Staver/NREL

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Inside Clean Energy

The promise of saving money could be an essential part of nudging the public to begin driving all-electric cars and trucks.

But it’s not easy to figure out the differences in costs between an EV and a model that runs on gasoline. The calculation needs to include the cost of the vehicle, maintenance, insurance and, of course, fuel.

So I took notice of a paper in the journal Joule that does a comprehensive estimate of fuel costs during the 15-year life of an EV compared to a gasoline model, with specifics for each state.

The authors, researchers at the National Renewable Energy Laboratory and Idaho National Laboratory, found that a driver of an all-electric vehicle could save money in all 50 states, based on the main scenario the researchers used in the study as the basis for their calculations, but that there were huge differences in the level of savings.

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This ranges from a high of $12,048 in cumulative savings in Nevada (about $800 per year) to a low of $4,571 in Massachusetts (about $300 per year) in the main scenario.

The figures are based on 2019 electricity and gasoline costs projected forward for 15 years.

The states with the highest savings tended to have high gasoline prices and low electricity prices, or some combination that leads to a big gap between the costs of gasoline and electricity—like California’s high electricity prices but even higher gasoline prices.

The co-authors also considered other, alternate scenarios in which EV owners charged their vehicles in the most expensive or least expensive ways possible. For example, it costs more to charge at some public charging stations than it does at home.

Under the most expensive scenario, four states—Alabama, Hawaii, Mississippi and Tennessee—had negative savings, which is another way of saying that in that scenario it cost more to charge an EV there than it did to use gasoline.

The flipside is a situation in which owners charge their vehicles in the least expensive ways possible. The largest 15-year savings were in Washington State, with $14,481 and the smallest in Rhode Island with $6,427.

The key point of these other, extreme scenarios is that it matters a lot how, when and where a vehicle gets charged, even within the same city, said Matteo Muratori, a senior engineer at NREL and co-author of the paper.

“When you drive by a gasoline station, you see a big sign and you know what that means,” he told me. “With electric vehicles, the story is a lot more complicated.”

But this is a good kind of complexity, one that goes along with reducing the carbon footprint of transportation and, if a car owner is diligent, saving money.

Minnesota Looks to Clean Energy to Boost Struggling Economy

Several states are looking to spend money on clean energy projects to help stimulate their economies. In Minnesota, some recent filings give an idea of what this might look like.

Xcel Energy, Minnesota’s largest utility, proposed $3 billion in spending last week. The company was responding to a directive from the state government that utilities should propose projects that would help the economy to recover from the damage done by the novel coronavirus

Now regulators are going to sift through the plans from Xcel and other utilities and decide what to approve.

“It’s important to remember that any money the utility spends comes from the customers,” said Annie Levenson-Falk, executive director of the Citizens Utility Board of Minnesota, a consumer advocacy group.

Customers ultimately pay for utility projects through their monthly bills, so any sudden increase in spending by utilities will get passed along to customers, probably at a time when many of them are struggling, she said.

As her organization goes through the proposals and prepares to participate in the state’s review of them, she will be looking for projects that provide benefits that justify the costs.

Xcel’s filing includes some big ticket items, like building a solar array of up to 462 megawatts, with a cost of up to $650 million. Construction would begin in 2022 and be complete in 2025. This would not be an immediate jump-start to the economy.

But some of the smaller proposals would have much more immediate and direct benefits for consumers.

One that caught my eye is a pilot project to provide rooftop solar for low-income customers, with a cost of $3 million. Xcel would build solar arrays on the roofs of houses and apartment buildings and provide a bill credit of $30 per month to customers who live there. Xcel would own the systems. The utility says this would provide benefits because of bill savings and the jobs and spending needed to build the systems.

I don’t envy regulators as they try to balance some dueling goals in reviewing these proposals.

Utility regulators are supposed to make sure customers are getting reliable service at a reasonable price. But states have increasingly looked to utility regulators to help with economic development, which is what’s happening here.

Spending on clean energy is a good thing, but without a careful weighing of the effects on consumers, it could lead to backlash. I’ll be watching to see how Minnesota regulators respond.

Tesla Aims for Low-Cost Message to Sell Solar. Will It Work?

Tesla is showing signs that it wants to revitalize its rooftop solar business, with a new marketing push saying it offers “the lowest-ever cost to go solar in the United States.”

This is a change of course for a company that has fallen behind its major competitors in selling rooftop solar at the same time its vehicle business is growing rapidly.

Tesla bought the solar installer SolarCity in 2016, but then proceeded to lose much of the market share SolarCity had built.

Tesla and SolarCity were already sister companies before the merger, located near each other in California’s Bay Area and led by Elon Musk, who argued that the combination of the two would be a financial win. The deal was widely criticized at the time as a bailout for SolarCity, and Tesla continues to deal with the legal and business fallout. Since the merger, Tesla’s solar business has been on the retreat, losing its industry-leading status in 2018 and then falling to third place in market share in 2019, behind Sunrun and Vivint, according to Wood Mackenzie.

Workers lay rooftop solar panels in San Francisco. Credit: SunPower/NREL
Workers lay rooftop solar panels in San Francisco. Credit: SunPower/NREL

Now Tesla is showing signs of a rededication to rooftop solar. The company claimed in a blog post late last week that it will offer solar at the lowest cost in the nation, citing examples that are about $1.90 per watt before tax credits, which is indeed a bargain compared to a national average of about $2.90 per watt. This follows Tesla’s recent introduction of a money-back guarantee that its solar systems are in fact the least expensive.

Tesla also has some advantages in being able to sell solar along with its Powerwall battery system, which has been a leader in the burgeoning market for energy storage.

Tesla says it can now sell solar for less because it has focused on mass-producing a few common sizes of systems, as opposed to focusing on custom sizes, and it has reduced the costs of sales and marketing by selling its systems online.

The company says an average customer buying a large rooftop system in California will save enough money on electricity to cover the costs of the system within six years—an unusually rapid payback.

I asked Tara Narayanan, an analyst for BloombergNEF, if Tesla’s emphasis on low costs was likely to succeed in attracting customers.

“Nobody else has managed to push their prices that low,” she said. “It remains to be seen if this actually translates to sales for Tesla.”

Competitors have been more effective than Tesla in going out and finding customers, with door-to-door sales and other methods, while Tesla is doing its sales almost exclusively through its website. Tesla’s focus on virtual sales may help during the pandemic, but the company has yet to show results in normal conditions.

The bottom line is that Tesla is still figuring out what approach is most effective and whether emphasizing low costs is a winning strategy, she said. 

Rooftop solar could be an important part of Tesla’s overall growth, but we don’t yet know if it will be.

Our Interstate Grid Is Old and Creaky. Here Are the People Who Want to Make It Better.

Think of the country’s electricity transmission system as a highway, only this highway doesn’t have nearly enough lanes in many places, some parts of it are falling apart from age, and vitally needed connections are not getting built.

It’s a mess, whose shortcomings are holding back the transition to clean energy because the parts of the country with abundant wind and solar power often do not often do not have enough power line capacity to efficiently move electricity over long distances.

A new initiative is aiming to fix these problems. The American Council on Renewable Energy and Americans for a Clean Energy Grid said last week that they are starting the Macro Grid Initiative, a project that aims to find cost-effective and politically feasible ways to build more high-voltage power lines in the places they are most needed.

The group is getting funding help from Bill Gates, and looks to me like it has the money and knowhow to try to address a vexing issue.

“They’re taking on a hard problem and I’m glad that they have, because somebody needed to,” said Ric O’Connell, executive director of the nonprofit GridLab in Berkeley, California, who supports the initiative but is not part of it. He described the condition of the grid as “kind of embarrassing.”

Electric power lines and transmission towers are seen in Denver, Colorado. Credit: Al Puente/NREL
Electric power lines and transmission towers are seen in Denver, Colorado. Credit: Al Puente/NREL

Right now, developers that want to build an interstate power line face years-long approval processes in each state and often-fierce opposition from residents and local governments who view the lines as an eyesore.

This means that wind energy in Wyoming doesn’t have an easy way to get to California, for example. The ability to import inexpensive renewable energy is usually a good thing, but it runs into political blowback.

“California is sort of thinking, ‘Why would we get out of state wind, when we could build in-state renewables that provide jobs and tax benefits and all that stuff? Why import when we can do it locally?’” O’Connell said.

Part of the challenge is that there isn’t really a national system for managing the flow of electricity. Instead, regional organizations manage the systems in their territories. This often contributes to a lack of adequate connections between the territories.

The lack of grid connections is a big problem considering that electricity needs to be used almost instantly, and sometimes it can’t get to the places it’s most needed.

And solving those problems is essential if the country is going to build the “reliable, resilient, decarbonized grid” that it needs, O’Connell said.

I-5 Should Become a Central Artery for Electric Trucks, Study Says

It’s already possible for electric cars to drive from Canada to Mexico, thanks to the placement of charging stations along I-5 and other major roads. Pretty soon, electric commercial vehicles may be able to do the same.

A group of West Coast utilities commissioned a 185-page study, released last week, that recommends installing charging stations adjacent to I-5. These stations, capable of serving medium-duty electric vehicles like delivery vans, would be placed by 2025, with an additional upgrade to some stations allowing charging for heavy trucks by 2030.

This would be an essential step toward encouraging businesses to switch their fleets to electric models.

Passenger electric vehicles crossing the West Coast can already juice up at charging stations located every 25 to 50 miles along I-5, Highway 99, and other major roadways. Construction began on this car-charging network back in 2011, when electric cars’ range—and practicality—was rapidly expanding.

The study on electric truck infrastructure is well-timed. California’s air pollution agency is scheduled to vote Thursday on a policy that would require manufacturers to transition more than half their production of gas-powered trucks to production of electric and hydrogen-powered vehicles. Consistent access to charging stations could make that mandate much more popular.

“Having that corridor infrastructure to support that fleet conversion would make a really huge difference,” said Amanda Myers, a policy analyst at Energy Innovation, which released a report last week evaluating the benefits of the proposed electric truck requirement. 

The Energy Innovation report found that under the new regulations, 60 percent of trucks and buses sold in California would be net zero-emissions by 2035. The transition would lead to savings of from $7.3 billion to $12 billion through 2040 because of lower costs for fuel and maintenance, among other factors.

And if the charging infrastructure were in place—as the utility-commissioned study proposes—electric trucks would be much more likely to follow.

Equipping I-5 for electrified commercial shipping comes with a preliminary price tag of $850 million, which would probably be split among utility customers, vehicle manufacturers and the government, the utilities have said.

Because the utilities are spearheading this, they should be able to coordinate to make sure that the electric grid can accommodate the heavy-duty truck-charging stations, which will require tremendous amounts of electric power, Myers said.

The proposed electric truck policy would also lead to almost $9 billion in public health benefits and prevent 900 premature deaths, the Energy Innovation report projected. Medium and heavy-duty trucks contribute 23 percent of all transportation greenhouse gas emissions.

In California, minority and low-income communities are disproportionately exposed to air pollution from transportation, which is associated with higher death rates from Covid-19.  I-5 passes through some of the hardest-hit communities, including the Los Angeles metro area.

If the electric truck requirement passes this week, “it’s not just a public health win, but it’s also an environmental justice win,” Myers said.

Reporter Nicole Pollack contributed to this story.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].

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