EV charging: the capacity charge eats the margin

“Seven charging ports, 457 380 ₴ a month, profit 54 020 ₴. I was already budgeting a fourth site against that profit. Then the report showed it: one site eats the earnings of two others” — that is how Artem Bilous, owner of an EV charging network in Lviv, began.

Operators with several stations recognise the picture. The ports work, the app shows sessions, revenue grows. Profit stands still.

The cause is almost never the price of electricity. A station sells kilowatt-hours and pays for kilowatts. Those are two different bills, and the second arrives even in a month without a single session.

Below the network is split into three sites and one kilowatt-hour. And it becomes clear why the fastest station earns the least.

How the network grew unmeasured

Artem started with one port in the yard of his own business centre. Capital spending was minimal then: the land was his, the connection next door. The economics were simple: buy cheaper, sell dearer, the difference is mine.

In four years the ports grew to seven. A site in a shopping mall appeared, with two fast ports. Then a station on the way out of the city. Then four slow ports in the yard of a residential complex.

Revenue over those years multiplied several times. Profit did not. Each new site was decided on a single figure for the whole network.

“The first port I knew to the kopeck: how many sessions a day, what was left after the electricity bill. By the third site I was signing a lease with one bank statement for the whole network. Where the network actually earned, I did not know then.”

Where the network margin hides

A charging network looks uniform. The same CCS connector, the same price for the driver, the same app with the map of stations. The economics look uniform too.

They are not. And the difference is not in the price of a kilowatt-hour: Artem's price is one across the network. The difference is how many hours a day a port actually charges.

The app does not show that. It shows sessions, kilowatt-hours and payments. Hours under the cable have to be counted per site, and before this nobody counted them.

While three sites sit in one row called “the network”, the main question stays unanswered. Which site funds the rest, and which lives at their expense.

Decisions are taken by site, not by network.

What the contract actually says

An electricity bill for a station has two different lines. The first is for what you consumed. The second is for what you are allowed to consume.

The second line is the capacity charge. It is a fixed payment for the kilowatts the grid holds ready for you. It does not depend on the number of sessions.

All the figures in this article are for 30 days. The capacity bill this month is the same as in any other.

Artem has one rate across all three sites: 310 ₴ per kilowatt a month. For the whole network that comes to 120 900 ₴.

The capacity charge does not know what you sold.

Contracted capacity in the agreement

Contracted capacity is the ceiling you wrote into the agreement with the grid operator. Install a 120 kW station — you asked for at least that much.

Against that ceiling the grid operator holds a cable, a transformer and a metering cabinet. Holds them every day, not at peak hours. So the payment arrives the same in December and in August.

There is only one way to cut it. Reopen the agreement and contract fewer kilowatts.

A kilowatt and a kilowatt-hour

These are two different measures, and the whole article stands on the difference. A kilowatt is power, the speed of charging. A kilowatt-hour is energy, what you sell to the driver.

A 120 kW port and a 22 kW port can deliver the same number of kilowatt-hours in a month. The fast one does it in an hour a day, the slow one stands under a car all night.

The capacity bill is written against the first measure. Revenue you receive against the second. Between them stands utilisation, and it decides everything.

A fixed charge is divided by a variable volume.

“I read the grid agreement as a formality: it carried the contracted kilowatts and the rate per kilowatt. I did not negotiate the terms, I signed them as standard. A year later I saw that the largest fixed cost of the highway site sat in that paragraph.”

The margin on a kilowatt-hour

Here is what is left from one kilowatt-hour sold. For the whole network this arithmetic is the same.

The driver pays 16.50 ₴. Energy purchase — 5.20 ₴. Card processing — 0.30 ₴. That leaves 11.00 ₴ of margin.

This margin is the same in the mall, on the highway and in the yard. It depends neither on the speed of the port nor on the site.

It is the base figure for every decision below. Every cost that eats earnings we measure in hryvnias per kilowatt-hour.

Everything that follows happens with these 11.00 ₴. Out of them come the capacity charge, the parking rent and maintenance.

Six accounting mistakes

The accounting Artem took his decisions from all those years is familiar to any charging operator.

• The network was counted as one revenue figure. The app showed the total across all ports, and that seemed enough.
• The capacity charge was treated as a utility bill. It sat in the line called “electricity” together with the purchase.
• Port speed was treated as an advantage. 120 kW sounded better than 22 kW, and the conversation ended there.
• Utilisation was not measured in hours. The number of sessions was visible, not the hours a port stood under the cable.
• Parking rent lived in a line of its own. That money never reached a particular port.
• A loss-making site was covered by network revenue. The bottom line added up, so no questions arose.

There is not a single complaint about the stations in that list. The ports worked, drivers charged, the app did not go down. All six points are accounting mistakes.

And accounting mistakes are visible neither at the site nor in the bank statement.

What the site report showed

Here is the month Artem took every decision from. Three sites, seven ports, 27 720 kWh delivered.

The main column here is charging hours per port per day. Not kilowatts, but hours under the cable.

Figure for the month	Mall	Highway	Residential yard	Total
Ports	2	1	4	7
Port power, kW	60	120	22	—
Contracted capacity, kW	150	150	90	390
Charging hours per port per day	3.2	1.2	4.5	—
Delivered, kWh	11 520	4 320	11 880	27 720
Revenue	190 080 ₴	71 280 ₴	196 020 ₴	457 380 ₴
Margin	126 720 ₴	47 520 ₴	130 680 ₴	304 920 ₴
Capacity charge	46 500 ₴	46 500 ₴	27 900 ₴	120 900 ₴
Parking rent	18 000 ₴	9 000 ₴	6 000 ₴	—
Maintenance	7 000 ₴	5 000 ₴	9 000 ₴	—
Result	+55 220 ₴	−12 980 ₴	+87 780 ₴	+130 020 ₴

Three sites, and the results are nothing alike. The residential yard gives +87 780 ₴. The mall — +55 220 ₴. The highway — minus 12 980 ₴.

The two key rows stand side by side. The mall and the highway contracted the same 150 kW. Their delivered volume differs almost threefold.

Rent and maintenance differ too, and that is normal. Parking spaces in the mall cost more, and four ports in the yard take more repairs.

Together they come to the same 130 020 ₴ of contribution Artem saw as a single figure. Nothing appeared and nothing vanished. The money was simply laid out by site for the first time.

One network figure hides the loss of one site.

One rate, three unit costs

The calculation has one main step. Divide each site's capacity charge by its delivered volume.

What comes out is the price of capacity restated per kilowatt-hour. Next to it stands the margin of 11.00 ₴ — and what is left for the owner becomes visible.

Site	Capacity charge, ₴ per kWh	Margin, ₴ per kWh	What is left, ₴ per kWh	Contracted capacity utilisation
Mall	4.04	11.00	6.96	10.7%
Highway	10.76	11.00	0.24	4.0%
Residential yard	2.35	11.00	8.65	18.3%

The rate is one — 310 ₴ per kilowatt. And the price of a kilowatt-hour that comes out of it differs several times over.

Nothing changed in the agreement or in the rate. Only the utilisation of the port changed.

The same rate, and 2.35 ₴ against 10.76 ₴.

Why 10.76 ₴ is not a rate

This is the commonest confusion after such a calculation. The table carries three different figures per kilowatt-hour. It looks as if Artem has three rates.

There is one rate: 310 ₴ per kilowatt a month. And 4.04 ₴, 10.76 ₴ and 2.35 ₴ are the same rate divided by a different volume.

Divide a fixed sum by a small volume and you get a large figure. That is all that happened here.

The conclusion from this is practical. The highway will not be saved by negotiating the rate with the grid operator. It will be saved either by more volume or by less contracted capacity.

Capacity utilisation: 4.0% against 18.3%

The last column is the most honest measure for a station. It is the share of contracted capacity you actually used over the month.

The residential yard uses 18.3%. The mall — 10.7%. The highway — 4.0%.

Four slow ports in the yard work more densely than one fast port on the highway. The difference is several times over.

This is the most unexpected row for any operator. The cheapest equipment in the network gives the best capacity utilisation.

Revenue comes from hours, not from kilowatts.

The site that runs at a loss

The highway on a line of its own. Every kilowatt-hour sold there carries 11.00 ₴ of margin.

The capacity charge takes 10.76 ₴ out of it. That is 98% of the margin. The owner is left with 24 kopecks.

Out of those 24 kopecks he still has to pay the parking rent and the station maintenance. That is why the site stands at minus 12 980 ₴.

The highway station is not broken. It is new, fast and fully working. It simply charges 1.2 hours a day.

A fast station on thin traffic is the worst combination.

“The site report had one row: the capacity charge on the highway — 10.76 ₴ per kilowatt-hour. Against a margin of 11.00 ₴. I asked twice and recalculated it myself. So two sites had been subsidising the third for four years.”

Break-even — 1.53 hours

Next, how much the highway has to sell to break even. The contracted capacity is unchanged — 150 kW.

The site needs 5 500 kWh a month. Right now it delivers 4 320.

In hours it reads better. A 120 kW port has to charge 1.53 hours a day. In fact it charges 1.2.

The gap is about twenty minutes a day. The price of that gap is 12 980 ₴ every month.

This break-even point moves only together with the agreement. Contract fewer kilowatts and it drops lower.

5 500 kWh and 1.53 hours are one and the same.

Profit after fixed costs

The three sites contribute 130 020 ₴. Out of it comes everything that holds the network together.

• Payroll — 48 000 ₴. A technician on call-outs and a person on driver support.
• Platform and app — 12 000 ₴. The station map, payments, port monitoring.
• Bookkeeping — 8 000 ₴. Reporting, invoices, taxes.
• Advertising — 8 000 ₴. So a driver picks your site and not the one next door.

Together that is 76 000 ₴ a month. Network profit — 54 020 ₴, or 11.8% of revenue.

For a business like this that is a normal level. Except that it is made of plus 55 220 ₴, plus 87 780 ₴ and minus 12 980 ₴.

None of those three terms stood in the report. Only the total stood there.

11.8% is an average of two pluses and one minus.

The cost of a siting mistake

The mistake on the highway is not in the station and not in the place itself.

The mistake is in the pairing. A fast port contracts a lot of capacity. Traffic on the way out of the city gives few hours.

Two sites side by side. The highway with its 120 kW station and the mall with two ports of 60 kW contracted the same 150 kW.

But their hours differ: 3.2 per port in the mall against 1.2 on the highway. So the mall divides its charge by 11 520 kWh, and the highway by 4 320.

The same capacity under different utilisation — that is the whole difference. The agreement at these sites is almost identical. One brings plus 55 220 ₴, the other minus 12 980 ₴.

Capacity is contracted in kilowatts and delivered in hours.

Where speed does not sell

A fast port is needed where the driver will not wait. On the highway that is truly the case: the person is driving on and is ready to stand for fifteen minutes.

But speed makes money only together with flow. One driver an hour will not fill a 120 kW port.

In the yard of a residential complex the logic is reversed. The car stands all night, and 22 kW is more than enough for it.

The driver there does not look at speed. He looks at whether the parking space is free in the morning.

That is exactly why the yard gives utilisation of 18.3%, and the highway 4.0%.

“I leased the parking spaces under the stations without a word about exclusivity. Petrol cars parked under the cable, and the port idled through hours I had paid for. I wrote new terms with the car park owner only after I saw the price of those hours.”

Two decisions instead of a new site

Artem did not close the highway and did not go looking for a new site. He took two decisions inside the network.

Closing the highway would have been the simplest decision. But the site on the way out of the city holds the drivers who later charge in the city.

Decision	What changes	Result
On the highway a 60 kW station instead of 120, contracted capacity from 150 down to 60 kW	Charge 46 500 → 18 600 ₴, delivered volume 4 320 → 3 600 kWh	Site −12 980 → +7 000 ₴
In the residential yard a subscription for residents, utilisation 4.5 → 6.0 hours a day	+3 960 kWh a month	+43 560 ₴ a month

Together, network profit grows from 54 020 ₴ to 117 560 ₴. That is 2.18 times.

No new site was needed for this. The price for the driver was not raised either.

The honest price of the first move

Replacing the station on the highway has its price, and it has to be named. A slower station means part of the drivers will not stop and will drive on.

So the delivered volume in the calculation falls rather than grows. It was 4 320 kWh, it became 3 600.

The margin of the site falls together with the volume. But the capacity charge falls harder: from 46 500 ₴ to 18 600 ₴.

That difference is what turns the site over. It was minus 12 980 ₴, it became plus 7 000 ₴.

Artem gave up the fast port on the highway deliberately. Re-registering the contracted capacity in the agreement took a month.

One clarification, so the figures do not blur. These 7 000 ₴ are the result of the highway after the decision, not the mall maintenance from the first table.

Less contracted capacity, more money.

A subscription makes ports denser

The second move does not touch the equipment at all. In the yard of the residential complex Artem launched a monthly subscription for residents.

A resident pays a fixed sum and charges at night. Port utilisation grows from 4.5 to 6.0 hours a day.

Four ports of 22 kW give +3 960 kWh a month. At a margin of 11.00 ₴ that is +43 560 ₴.

The contracted capacity was not touched. The charge stayed at 27 900 ₴, and the delivered volume grew.

The same transformer, the same metering cabinet, the same parking space. The port simply stands under a car for longer.

The same capacity, more hours sold.

Profit up 2.18 times

Two decisions together. The highway stopped being a minus. The yard added 43 560 ₴ a month.

Network profit — 117 560 ₴ instead of 54 020 ₴. No new sites and no new ports were bought for it.

What it took was seeing the capacity charge separately for every site. And dividing it by the kilowatt-hours that site sold.

“I held the budget for a fourth site for two years: equipment, connection, rent. Instead of it came negotiations with the grid operator about contracted capacity and the replacement of the highway station. Those decisions called for almost no capital spending, and the profit they gave was more than double.”

One metric every month

Three changes came out of this, in the documents. Not one of them is about equipment.

• Every site became a line of its own. Delivered volume, revenue, margin and result — across the three sites, not as one network figure.
• The capacity charge came out of utilities. Now it stands on its own and divided by the kilowatt-hours delivered: 4.04 ₴, 10.76 ₴ and 2.35 ₴.
• Hours appeared next to capacity. Charging hours per port per day — the column that had never been in the report.

No new equipment and no new prices for drivers. Only three columns that were not there before.

Every month Artem looks at one metric: the capacity charge per kilowatt-hour delivered, for each site. While that figure stays below the margin, the site pays for itself.

A takeaway for business owners. If you pay a fixed sum for the right to consume and sell a variable volume, you have the same problem. Divide that fixed payment by the volume you actually sold, and do it for every location separately. Put the margin per unit next to it. The difference between them is what really stays with you. The same holds for any business with contracted capacity or rented space: a car wash, a self-service laundry, a cold store.

What to check in your own network

• Divide the capacity charge by the kilowatt-hours delivered. One step gives 4.04 ₴, 10.76 ₴ or 2.35 ₴ — and the site at risk is visible at once.
• Measure utilisation in hours, not in sessions. 3.2 hours per port and 1.2 are two different economies at the same contracted capacity of 150 kW.
• Do not put a fast port where there is no flow. 120 kW at 1.2 hours a day gives utilisation of 4.0%.
• Check the contracted capacity in your agreement. On the highway, cutting it from 150 to 60 kW took the charge from 46 500 ₴ down to 18 600 ₴.
• Work out break-even in hours. 1.53 hours a day is the line past which the highway site stops losing money.
• Look for density, not for speed. The residential yard on ports of 22 kW gives utilisation of 18.3% and a result of 87 780 ₴.
• Do not judge a network by one figure. 54 020 ₴ of profit is +55 220, +87 780 and −12 980 together.

Money does not vanish — you just do not see it

People think two things decide everything about charging stations. A place with flow and a fast port. Without them you really cannot start.

But earnings are decided by a third. How many charging hours the capacity you contracted is worth.

That gap does not close by itself. The bottom line will not show it: it adds up the network, and the mistake lives at one site.

As soon as the capacity charge gets a price per kilowatt-hour, the main thing becomes visible. These 11.8% of profit belong neither to the mall nor to the highway.

It is an average between a site where 8.65 ₴ is left out of 11.00 ₴ and a site where 24 kopecks are left.

Work it out across your own sites. One column in the report — and the network stops being a single figure.

How to see this in your own network

Everything above rests on one row: not the network as a single figure, but each site on its own — with its contracted capacity, the kilowatt-hours it actually delivered, and the capacity charge restated per kilowatt-hour. As long as the result is measured by network revenue, you see neither that one site gives up 98% of its margin to capacity, nor that slow ports in a residential yard are four times better utilised than fast ones on the highway. When the same data is collected automatically, it becomes visible which site pays for itself — which is exactly why owners of small and medium businesses use Finmap: to see the financial picture rather than guess at it.

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Topic foundation: Management Accounting Explained: What It Is and Why Owners Need It