California, the EV adoption and clean energy leader in the U.S., is evaluating legislation to mandate bidirectional V2G charging capabilities for all EVs and EV charging equipment sold in the state after January 1, 2027. The bill, SB-233, aims to advance grid resilience and protect the climate by using EVs as “batteries on wheels,” tapping their stored energy to balance electricity supply and demand rather than bringing high-polluting peak generators online.
This smart EV charging technology, also known by its use cases — vehicle-to-home (V2H), vehicle-to-building (V2B), vehicle-to-grid (V2G), or vehicle-to-everything (V2X) — holds tremendous potential for solving grid limitations. It’s gaining attention and support, with more than 115 V2X and V2G projects ongoing or completed across 25 countries, although most are very small.
Nonetheless, the technology is nascent, with a limited number of bidirectional-capable EVs and home chargers on the market today and poorly defined standards. Unlocking the full promise of V2G will require significant cooperation and momentum across vehicle and equipment manufacturers, power utilities, standards bodies and regulators, EV charging providers, and other industry players.
Use cases for bidirectional charging
Because vehicle-to-home is the simplest bidirectional charging use case to implement, and because Californians are already motivated by the states’ history of rolling blackouts due to overtaxed grids, V2H solutions will lead the way in marketplace availability. Some are already available via partnerships between automakers, home EV charging manufacturers, and other participants.
With V2H, an EV’s battery can keep the lights on, the refrigerator running, and devices charged for up to three days in the event of a blackout. Consumers can also reduce home energy costs and help balance the grid by charging EVs during off-peak hours and using EV battery power during peak hours.
Vehicle-to-building works much the same way but on a larger scale. Most cars sit in parking lots during the day. With V2B, facilities that offer EV charging at the workplace can also draw power from multiple cars during an outage. EV charging management software ensures that the vehicles maintain enough charge for driving. SB-233 covers school buses as well so they can power V2B and fleet depots use cases.
The ultimate promise: vehicle-to-grid
Many see V2G, where the EV receives power from the grid when it is cheap or plentiful and gives power back to the grid to balance and supplement the grid as needed, as the ultimate game changer. While the impact of a handful of EVs is negligible, consider the positive climate impact if millions of mobile batteries were on tap to help replace fossil fuel-based electricity.
It has the potential to be a win-win for all. Individual drivers (participating through third-party aggregators) and fleet operators can realize new income streams by selling stored electricity to utilities. Power utilities leverage EV batteries rather than investing in infrastructure expenditure and use them as a smart solution to balance demand and response
And keeping this circular energy economy localized — with the help of smart energy management software — removes the need for utility-grade storage for capturing excess solar and wind energy and eliminates the need to build costly and very unpopular high-energy distribution networks to connect distant renewable energy “farms” to the urban centers that need the electricity.
Obstacles to rolling out V2G
Creators of the proposed California legislation understand that interoperability is essential to realizing this vision. Industry stakeholders must cooperate to continuously develop unified standards and protocols, to enable any EV to work with any bidirectional EV charging station via a standard connector, which can communicate with any back-end smart EV charging management system and contribute power to the grid via any utility in any location.
V2G success will also depend on market and consumer acceptance. Impact of V2G on battery life is a common concern, but recent research bears out earlier studies in showing that V2X does not significantly degrade battery health. Another challenge, particularly for consumers, is the cost of equipment and electrical service upgrades required.
The right business models can incentivize adoption
People and businesses buy vehicles for transportation, not to serve as grid assets. Although drivers may value having a way to reduce carbon footprint, save money, and participate in stopping climate change, the right business models are also key to V2G adoption.
For individual EV owners, time-of-use pricing is an effective money-saving incentive for shifting grid consumption to off-peak hours. It can also pave the way for consumer participation in energy arbitrage, which provides actual revenue through buying low and selling high. Rebates and tax credits to offset the up-front costs of buying and installing bidirectional charging equipment are also key.
Fleet operators can realize cost savings through optimized charging and discharging schedules and generate revenue by taking advantage of dynamic pricing, energy arbitrage, and demand response programs. Establishing these programs in a timely manner will require utilities and regulators to both be on board.
All eyes on California
With what is currently the largest EV marketplace in the U.S., California has buying power behind its proposed V2G mandate to the EV industry. What’s more, it’s expected that other states will follow California’s lead in matters of climate protection and EV adoption. By calling for full interoperability and scheduling testing events leading up to 2027 — in addition to mandating V2E-capable EVs and chargers — turning SB-233 into law can help move the needle on adoption.