How to jump-start the vehicle-based smart grid

Editor's note: To learn more about the potential for vehicle-to-grid technology, be sure to check out VERGE@Greenbuild, coming this fall to San Francisco, November 12-13, 2012.

The triple tragedy that struck Japan in March 2011 is already remaking global energy markets. In the wake of earthquake, tsunami and nuclear disaster, public outrage over the meltdown delayed or derailed nuclear energy’s promised renaissance in many markets.

Yet if Japan’s tragedy hastened the demise of one energy technology, it may have jumpstarted another. In the year since, as Japan struggled to cope with crippling shortages of electric capacity, a handful of automakers have brought to market appliances that convert electric vehicle batteries into systems that can provide backup power to homes and help support the teetering grid.

In April, Mitsubishi Motors unveiled a portable adaptor, the MiEV power Box. For roughly $1,800, the appliance lets owners of MiEV electric cars plug in, and draw up to 1.5 kilowatts. A month later, Nissan followed suit with its Leaf to Home, a $7,000 device that, drawing power from a Leaf EV, can power a typical Japanese home for up to two days. Toyota too is demonstrating a similar system linked to its plug-in Prius hybrid in 10 homes and plans to launch a commercial version next year, if all goes well.

For the thousands of Americans suffering through power problems this summer—due to a punishing heat wave and storms in the mid-Atlantic—the appeal of these technologies is surely tantalizing. The case for EVs would sure seem more compelling if consumers knew the Chevy Volt or Nissan Leaf in their garage could also power their homes during an outage.

In fact, vehicle to grid, or V2G, has emerged as a sort of holy green grail. All manner of energy gurus -- from to Rocky Mountain Institute-founder Amory Lovins to the DOE to Wired magazine -- have recognized V2G as a grand solution to many of the problems that bedevil our grid and transportation fleet.

The promised benefits go well beyond household backup. As consumers buy more EVs, the combined stock of batteries offers utilities a low-cost path to grid-scale storage—why pay for grid batteries, if utilities can “borrow” EVs to perform the same trick? In turn, cheaper storage capacity paves the way for more solar panels and windmills by making it easier to store their notoriously variable output. And since utilities today pay for the sorts of storage services EVs might deliver, V2G systems could earn cash payments for EV owners, thereby lowering the cost of EVs and boosting their sales.

Yet despite Japan’s new systems, a comprehensive V2G solution remains years off. “[They are] a good first step, but they essentially turn the car into an expensive backup generator. There’s still a big leap to V2G,” says Ted Hesser, Energy Smart Technologies analyst at Bloomberg New Energy Finance.

In Japan, those new systems can support the grid indirectly, by feeding power back to the households and reducing their pull from the grid. But for now, they cannot link to the grid: by regulation, they’re strictly vehicle-to-home, or V2H, Ali Izadinajafabadi, a Tokyo-based analyst for Bloomberg New Energy Finance wrote in an email.

Next page: Navigating the thicket of barriers