Many see the electrification of transportation as a key to reducing carbon emissions. One of the obstacles to putting more electric vehicles (EV) on the road is the need for more charging infrastructure. For example, there are currently 130,000 publicly available EV charging stations in the U.S., according to the White House. That number will need to grow nearly tenfold by 2027, according to an estimate by S&P Global, to support the projected growth in EVs. The full electrification of the U.S. transportation sector will require even more charging infrastructure. 

The high, up-front cost of installing EV infrastructure is among the many roadblocks facing even more widespread EV adoption. That's driving two leaders in the clean energy sector to join forces with a potentially game-changing solution. Shoals Technology Group (SHLS -0.15%) and Brookfield Renewable (BEPC -0.45%) (BEP 0.57%) are forming a strategic partnership to launch a charging-as-a-service (CaaS) solution that could help accelerate the transition to EVs

Breaking down the barriers for EV charging

A major roadblock to deploying more EV charging infrastructure is the large up-front capital investment for charging equipment, electrical infrastructure, and installation. In addition, it typically takes months to build EV charging infrastructure due to the trenching needed to bring power to the EV charger, and the technical and regulatory issues developers often face. 

Shoals Technology and Brookfield Renewable are joining forces on what they believe is a breakthrough solution that solves all these issues. The partnership combines Brookfield's expertise in providing renewable and distributed energy (i.e., energy produced near the end user, like rooftop solar) and its funding capabilities with Fuel by Shoals, an aboveground EV charging infrastructure solution. The partners can offer customers an end-to-end solution for their EV charging needs.

Instead of investing capital up front to install EV charging infrastructure, subscribers will pay a monthly fee over a fixed period to have the EV charging infrastructure installed. In addition, subscribers can have solar energy, battery storage, and other distributed energy products installed by Brookfield at their site to power the EV charging infrastructure. Brookfield and its partners would invest the capital to support the EV charging infrastructure and any associated renewable energy that it would operate. Subscribers can choose an EV charger that best fits their needs from various manufacturers. 

Going a step further

The current EV charging business model is similar to the technology sector's sales strategy. Traditionally, EV charging companies sold the hardware (EV charging stations) directly to customers. Because of that, customers needed to make a rather large up-front investment to have the infrastructure installed on their site. In addition, EV charging companies often require customers to lease the software powering their hardware under a software-as-a-service (SaaS) model. They also mandated them to purchase an annual subscription to cover maintenance.

However, some EV charging manufacturers like ChargePoint (CHPT 6.50%) are starting to lean further into the service model. For example, the company offers ChargePoint-as-a-service (CPaaS) that bundles the hardware, software, and maintenance contract into one subscription. ChargePoint works with a third-party investor to fund the charging infrastructure that ChargePoint installs and monitors. That business model enables customers to avoid the up-front capital expense of the hardware and its installation.

Shoals and Brookfield are taking this model further by offering the entire package (i.e., the EV charger and renewable power) as a service. In addition, Brookfield and its partners will self-finance the capital investment. This end-to-end solution will help reduce some of the friction slowing down the installation of new EV charging infrastructure. Because of that, it's poised to be a "game-changer and will accelerate EV charging infrastructure and clean energy deployments across the U.S.," according to comments in the press release unveiling the collaboration by Valerie Hannah, a managing director at Brookfield Asset Management

That could accelerate growth for EV-related companies. EV charging companies like ChargePoint would be able to sell more chargers. Meanwhile, the increasing availability of charging infrastructure should drive more EV demand. 

A winning combination

Brookfield Renewable and Shoals are respective leaders in their fields and drivers of the energy transition to cleaner technologies. They're now joining forces on a potentially breakthrough solution to lower the barriers to deploying new EV infrastructure. Their CaaS offering could help accelerate the deployment of EV charging infrastructure, paving the way for more EVs to hit the road in the future. It could be a major growth driver for the partners and EV companies, potentially putting a charge in their stock prices in the coming years.