Reducing peak load from electric vehicles through grid tariffs: Evidence from a randomized field experiment

The rapid adoption of electric vehicles (EVs) is essential for reducing CO2 emissions, but it puts growing pressure on electricity grids by driving up peak demand. Grid tariffs can help mitigate this impact by encouraging more efficient use of grid capacity. We conduct a randomized controlled trial among more than 600 households with home EV charging to evaluate their response to a capacity-based tariff that imposes an exceedance charge on electricity consumption above a predefined capacity threshold. We test two variants: a static exceedance tariff, which charges for exceedances at all times and encourages households to reduce overall capacity use; and a Time-of-Use (TOU) exceedance tariff, which only charges for exceedances during peak hours (5 p.m. to 2 a.m.), incentivizing demand shifts to off-peak periods. We find that the static exceedance tariff reduces individual peak demand and exceedances above the threshold by approximately 5 to 10 percent, while not shifting charging to off-peak hours. In contrast, households exposed to the TOU exceedance tariff shift charging to off-peak hours after 2 a.m., but without reducing individual peak demand or exceedances. Although TOU tariffs are designed to reduce peak demand, they may unintentionally create new peaks by concentrating EV charging in the same off-peak hours, revealing a clear drawback. Overall, our findings suggest that the static exceedance tariff may be more effective in reducing individual peak demand and may help mitigate the impact of EV charging on the distribution grid.