LCFS credits: what they add per kWh, net of commission

Clean-fuel credits are the most commonly overstated revenue line in a charging-site pro forma — not because the programs are unreal, but because the number people quote is the gross one.

California's Low Carbon Fuel Standard pays a credit for each kilowatt-hour of electricity dispensed to vehicles. Around $0.06 per kWh is the figure usually cited, and at real Supercharger volumes it compounds into six figures a year. What arrives in the operator's account is meaningfully less, on a schedule that does not match the calendar.

Three deductions between the headline and the deposit#

The aggregator commission. Very few site operators register with CARB and sell credits themselves. The credits are generated per site, the market is quarterly and wholesale, and the reporting obligation is continuous. In practice an aggregator handles registration, quarterly fuel reporting, and credit sale, taking a commission on the proceeds. The model's default is 15% — the middle of the range typically contracted — and it applies to the gross credit value, not to a net.

The registration gap. Credits accrue only once the site is registered and reporting. That process is not instantaneous, and it does not begin until the site is energized and dispensing. The model books zero credits in month one for this reason, which costs roughly one twelfth of the first year's line.

The payment lag. LCFS settles quarterly, and proceeds arrive after the reporting quarter closes. The model applies a one-quarter lag by default, so credits accrued in a quarter appear as cash in the next one. This does not reduce the total, but it moves cash out of the months when a new site is least liquid, which is exactly when it matters.

What that does to a real number#

Take a twelve-stall site dispensing about 1.73 million kWh in its first year — a busy, well-utilized station.

The line arrives at 78% of its headline value — about $22,900 less than the gross figure, before considering that a quarter of it lands in the following year's cash.

Over fifteen years the proportion holds, so the difference between modelling gross and modelling net compounds into several hundred thousand dollars of projected cash that does not exist. In a pro forma that is close to break-even this single distinction can flip the sign of the result.

Where the credit exists at all#

LCFS is not a federal program, and this is where a national assumption breaks hardest. Four states in the model carry a clean-fuel credit at a non-zero rate, and their rates are not similar:

Every other state in the library carries zero — not as a placeholder, but as a documented finding that no clean-fuel program applies to charging in that jurisdiction. A site in Texas or Florida earns no credit at all, and a pro forma that carries a California LCFS line into those states overstates revenue by the whole amount.

The rate spread matters as much as the presence of the program. At Washington's $0.0184, the same 1.73 million kWh generates about $31,800 gross — under a third of California's figure for identical throughput.

The volatility nobody models#

One further caution. The credit price is set by a market, not a schedule. CARB's LCFS credit price has moved substantially across its history in response to program amendments, banked credit supply, and compliance demand. The rate in any model is a snapshot.

Because of that, the model treats the credit rate as an input rather than a constant, and the sensitivity analysis includes it among the drivers it flexes. A site whose viability depends on the credit holding its current price is carrying a market exposure worth stating explicitly — which is different from a site where the credit is upside on top of a result that already works.

What the model does#

The engine prices LCFS gross at the state's credit rate, deducts the aggregator commission, books nothing in month one, and lags the cash by a quarter — then carries the escalation and the state's own rate through all fifteen years. Credits appear in the cash-flow statement on the month they are received, not the month they are earned.

The incentives checker records the current programs by jurisdiction with sources, and charging-site taxes that are not income tax covers the other non-obvious lines on the same statement. Every rate and its effective date is listed on the methodology page.

Figures here are model outputs under stated assumptions, not advice or guarantees. Credit prices, commission terms, and program rules change; verify current values with CARB, the relevant state program, and any aggregator contract before relying on any number.