Embracing the Future: The Rise of Electric-Based Equipment

By Dian Kohoutek, CPPA

June 16, 2023

Electric based construction or aggregate equipment is not a new thing. However, it has been commonly seen in very limited application such as demolition and mining.

Electric machinery, once considered a niche concept, is now gaining prominence on job sites across the country. It is only a matter of time before the widespread adoption of electric machinery and equipment is seen in more businesses. Here are the advantages and challenges of electric-based equipment, as well as a discussion on the necessary preparations to accommodate these changes in the not-too-distant future.

The Advantages:

1. Reduced carbon emissions and environmental impact.
Electric-based equipment aligns with the growing emphasis on environmental sustainability. By reducing carbon emissions, businesses can contribute to a cleaner environment and potentially earn carbon credits. These credits can be sold to other organizations looking to offset their emissions, presenting additional revenue-generating opportunities.

2. Lower operating costs compared to traditional fuel-powered equipment.
With an average runtime of four to eight hours and an overnight eight-hour charge, electric compact equipment eliminates idle time and maximizes productivity. Compared to traditional reciprocating engines, electric-based equipment has fewer friction-generating parts. This results in reduced wear and tear, minimizing the need for frequent maintenance and parts replacement. By reducing dependency on diesel fuel, businesses can achieve substantial savings in operating costs.

3. Quieter operation, reducing noise pollution.
Electric-based equipment, such as electric machinery and vehicles, generally produces significantly less noise compared to traditional fuel-powered counterparts. This is because electric motors operate more quietly and efficiently, resulting in reduced noise emissions during operation.

4. Tax incentives.
Investing in electric machinery can provide businesses with tax credits and incentives. Governments at regional and national levels often offer financial benefits to promote the adoption of eco-friendly equipment. Staying informed about available incentives can help businesses maximize their return on investment and offset initial cost.

Challenges and Considerations:

  1. While the charging infrastructure in big cities is already well developed, remote areas still require significant improvements.
  2. Cold climates or remote regions with limited charging infrastructure may pose challenges.
  3. There is also a significant need to build clean energy manufacturing to complement the transition from fossil fuels to clean energy, without hindering the growth of electric equipment and machinery.
  4. While tax incentives could potentially offset the initial cost of acquiring new electric equipment/machinery, the resale values remain to be seen. Larger operators may have better charging infrastructure compared to smaller operators, who typically purchase used equipment. This potentially makes for a smaller pool of used electric equipment buyers, further highlighting the importance of readily available charging infrastructure.

In conclusion, electric-based equipment is rapidly gaining traction in the construction industry, and its widespread adoption is inevitable. Businesses that proactively embrace this change will enjoy lower operating and maintenance costs, benefit from tax incentives, and contribute to a more sustainable future. From an appraisers’ perspective, it is crucial to understand the advantages, challenges, and nuances of electric-based equipment and guide businesses in making informed decisions that position them for long-term success in the evolving construction landscape.

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