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Return home8.3. Funding mechanisms
Decarbonising fleets needs high upfront investment, but public sector funding options can reduce costs. Charging infrastructure offers long-term savings, with funding mechanisms helping manage initial expenses.
Decarbonising fleet vehicles is a significant and necessary step in transforming the way organisations use transport and energy. While lower energy and operating costs can deliver long-term savings, achieving this transition often requires substantial upfront investment.
Public sector organisations may be able to access a range of funding and financing mechanisms to help reduce initial capital costs. Although some of these options can increase ongoing operational expenditure, they may make fleet decarbonisation more achievable by reducing the need for large upfront investments and spreading costs over a longer period.
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To transition a fleet to electric vehicles (EVs), organisations need reliable access to charging infrastructure. While public charging networks can be used, installing charge points at key operational locations is often more cost-effective over the long term. However, this approach requires significant upfront investment, ongoing maintenance and the management of back-office systems.
Although owning and operating charging infrastructure can reduce long-term costs, some organisations may find the upfront capital investment challenging. There may also be concerns around the technical skills, expertise and resources required to manage charging infrastructure effectively.
Many charge point operators (CPOs) offer fully managed solutions that can include charging infrastructure, maintenance, back-office systems, fleet charging management and funding arrangements. Under these models, the CPO funds the installation and recovers its costs through charging fees or service charges. In some cases, vehicle leasing or supply can also form part of the package.
These arrangements may include certain conditions. For example, a CPO may require public access to charge points at specific times, set minimum utilisation levels or only support the installation of particular charger types, such as rapid chargers. While this approach is often less expensive than relying entirely on public charging infrastructure, it may be more costly over the long term than owning and managing charging infrastructure directly.
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The Energy Systems Catapult’s Net Zero Go platform includes guidance on financing options available to local authorities, although registration is required to access some content.
A range of organisations provide funding, finance and lending options that may support fleet decarbonisation projects and charging infrastructure investment. These include Salix Finance, the UK Infrastructure Bank and Public Works Loan Board (PWLB) lending.
The Scottish Futures Trust also provides detailed guidance on funding mechanisms and approaches to financing electric vehicle charging infrastructure and fleet decarbonisation projects.
