Save 1/100th of a tree
Buy the eBook

Also available at
Chapters Indigo,
Amazon,
iUniverse and more

Last updated 2026.07.09
(I have been providing this core message since 2005. I update it occasionally to try to keep it current and relevant. A thank you to the Electric Vehicle Council of Ottawa for asking me to present at their February 2024 meeting and a following Electric Vehicle Society presentation, which twigged me to updating this item.)

Why Vehicle to Grid (V2G) Will Never See Mass Adoption in North America

Darryl McMahon

Picking a Nit

This update to clarify the current (2025) corrupting of the term “V2G” or “Vehicle to Grid”. Something else is happening (starting approximately 2023) that will achieve much the same goals, but the differences matter.

Short version: for practical purposes, there is no such thing as Vehicle to Grid (V2G).
What is now being described as V2G is really V2H + H2G.
The difference isn't just semantic, it actually matters for implemenation purposes. The devil is in the details.

Introduction

The EV, EVSE and electrical utilities, along with a group of ardent and vocal supporters, argue continuously that V2G is the killer app for EVs. I know, I was part of such discussions as early as 2001. What I have learned and concluded is that widespread use of Vehicle to Grid (V2G) is very unlikely to happen in North America – ever. I lay out my case below.

I have long argued that EVs ARE the killer app for the smart grid, but not in the form of V2G (original definition).

Terminology

Because the case for “Vehicle to Grid” is superficial and the reality is complicated, a lexicon of jargon has sprung up to confound the unwary. I’m going to review a few terms that get thrown around, but for this short overview treatment, not the details from the fields of law, engineering, product design, and finance / economics. I'm putting these in alphabetical order by acronym/intialism for ease of reference, likely at the cost of comprehension on the first read. Sorry, but I think you'll be coming back to this document more than once.

H2G (House to Grid)

This is where electricity is supplied from a house (or other structure) to the grid under an agreement. Note, no EV required. If an EV is supplying power to the house while the house is supplying power to the grid, is the vehicle owner entitled to compensation? In this case, how will compensation for the electricity be calculated and compensated?

H2V (House to Vehicle)

This is just plain vanilla EV charging for a vehicle charging at the home of the vehicle owner or operator, like we have been doing since the 1970s, but the key is that there is no formal compensation between the ratepayer (likely the homeowner) providing the electricity and the vehicle owner or operator, and they may well be the same person. The utility may know who is paying their bill, but they don't know what vehicle is being charged or who owns it. It's just electricity delivered to the house as far as they can see.

V1G

This isn’t actually a cute initialism for any real words. It’s a double-entendre on V2G, where the ‘2’ has been replaced and given a new meaning of 1-way electrical flow, rather than just substituting for the word ‘to’. So V1G just means a vehicle connected to the grid for charging, but not supplying power to the grid, and where the grid operator gets to play games with the electricity supply to optimize loading for the utility’s purposes. It can also be called smart charging, or behind-the-meter controlled charging. It has real advantages for utilities with varying power demands over the course of the day, especially if there is low demand in the middle of the night. But, like the current V2G (V2H + H2G), there is no real direct grid to vehicle connection, it's really G2H (Grid to House - I didn't bother creating a defintion paragraph for this one) plus H2V. I had the privilege of working on a funding proposal for a unique and flexible system for intelligently charging multiple EVs simultaneously and regulating power supply based on vehicle demand and current grid supply conditions. I was a big fan for this approach, and still am. It's a shame that project did not move forward.

A broad strokes equivalent has arrived in the form of Ultra Low Overnight (ULO - in Ontario - goes by other names elsewhere) charging price structure. It seems to be sufficient for the utilities with fairly constant baseload supply systems and predictable daily cycle demand curves (high at dinner time, low overnight). The price signal incentive gets customers to shift their loads from peak times to low demand times, smoothing the curve and reducing utility investment in more generation. The utility can change the overnight low rate price signal to fit their financial model to reduce their overall investment costs.

V2B (Vehicle to Building) & V2C (Vehicle to Campus)

This is essentially the same physical set-up as V2H, but the vehicle owner may not be responsible for the electricity bill of the building. In this case, how will compensation for the electricity be calculated and compensated? (V2C is just a variant on this. The V2C pilot projects I have seen have the campus owner and vehicles owner as the same 'person', e.g. a university, so the compensation issue is avoided.)

V2G (Vehicle to Grid)

This is the utopian general case for using any EV to supply power to the grid at any connection point with any electric distribution company. Note the requirement for universality. Back in 2005, when I was having a beer with a couple of U.S. utility guys at an EV conference, our cute definition was approximately "any EV, at any plug, when the utility wanted the power". The key to this scenario working is that EVs will be connected to the grid and available to supply power to the grid at times of very high demand.

Electric utilities are expected to have supply capacity in place to meet typical daily maximum demand, plus a buffer, plus the ability to curtail supply to certain customers, plus the ability to obtain capacity from interconnected jurisdictions in extreme circumstances. The local utility is unlikely to turn to V2G until they are past utilizing all these options. And the thinking at the time was that they would have to provide notice to the community at least 24 hours in advance (so EV owners would know enough to be fully charged overnight in order to provide supply during the peak demand time the next day). It was expected that the vehicle owner would have to be compensated for the electricity they provided to the grid, plus a bonus for depreciation on the battery (because very full charging could minimally reduce EV battery life.) Implicit in this arrangement was that the utilities would deal with the consequences of power flowing back into the grid, and how to compensate vehicle owners for the power they provided when requested by the utility.

The arrival of a useful quantity of EV batteries looking for a second life is just becoming a reality as of 2026, with commercial scale availability of reconditioned packs which can be configured for stationary energy storage, and this presents a better solution than V2G on multiple fronts.
Millions of Old EV Batteries Could Get a Second Life Helping Power The Grid
A) it offers electric utilities a lower-cost entry point for acquiring stationary energy storage, which could be installed at substations to provide better local power stability and reduce outages
B) parallel strings of batteries for grid use is a less demanding application for a battery than in an EV which is constantly shifting between high acceleration demand, high current regenerative braking supply, cruising power demand and zero current flow (parked and not charging)
C) it offers an industrial scale after-market for auto-recyclers to sell removed battery packs to battery refurbishers / repackagers / recyclers like Redwood and B2U, ending the EV batteries go to landfill myth
D) it could create a new business line for automakers to pay dealers and independent EV service operators for the returned packs (within or outside warranty replacements) so they can offer vehicle owners battery replacements at a lower cost when an EV is in good condition, but the battery for some reason is not
E) unlike batteries in an EV, the grid operator can be assured the repurposed stationary batteries will be connected to the grid when needed
F) in the event the utility grid market is saturated or uninterested, there should be immense demand now by intelligent builders of new data centres who want reliable, stable power based on affordable in-house supply, and today affordable supply means zero-fuel-cost renewables combined with battery storage
G) if the data centre folks aren't that smart, more and more another EV-related application would be buffer batteries at high-use EV charging stations to buy grid power at low grid demand times for charging EVs later when grid power may be more expensive (time arbitrage)
H) if those applications are saturated, households are going to want their own battery storage capacity to ensure power supply stability for their own needs (medical equipment, communications equipment, basic lighting, refrigerators and freezers to keep food safe, sump pumps to protect from flooding, etc. The likely lower capacity per volume (space) modules will likely be more attractive to housing where space (another cubic metre or so) is not at a premium.

V2H (Vehicle to House)

This has real potential for people who need a stand-by generator due to frequent power disruptions. Nissan did provide an optional unit which allowed a Leaf to supply 240-volts to a building, for roughly US$2,000. That’s comparable to installing a robust generator with enough capacity to power a house. It avoids the complication of dealing with the utility for connection privileges to supply power, and has the potential to power the house in non-emergency situations at times of high electricity prices, which makes the economics more attractive than V2G, while also providing the comfort of knowing back-up power is available when needed. It is all paid for by the homeowner as 'property improvements'.

V2L (Vehicle to Load)

This one is a real thing, and has been for years. I did this in the 1980s from my EVs, such as jump-starting gas cars on really cold days. Even some early hybrid pickup trucks supported V2L with AC outlets in the vehicle (sometimes called a Contractors Edition). It solves a real problem (worksite power or mobile power) and can replace separate generators). It does not bring the issue of the vehicle owner bearing the cost not being the beneficiary of the supplied electricity, which is where we get to the complexities of payment.

V2X (Vehicle to indeterminate electricity sink – or all the above)

I don’t like this term, as it allows the V2G zealots to confuse the applications of taking power from the EV on-board storage as though it’s only a matter of running a power cord and ignoring issues which are not directly about electricity flow. However, the breadth of ways to use the energy in an EV battery - as mobile supply and sink - deserve more attention and innovation.

Regulatory Environment

Suppose we have a vehicle equipped so that it can supply 120 or 240 volts AC to an external load (V2L - like the Hyundai Ioniq 5 can), having inverted the DC power from the internal traction battery, and is able to synchronize with the local grid (which is on a 60 hertz sine wave, which the Ioniq 5 cannot). This is no trivial assumption, and it will come with a cost premium on the vehicle.

In most North American jurisdictions, it is illegal to make such a connection. It is called backfeeding. If the grid is up, the potential for unsynchronized AC supply is simply not acceptable to the utilities. If the grid is down, backfeeding presents a safety hazard to workers who are trying to restore the grid supply network. This is why houses with generators set up to take over when there is a grid outage are REQUIRED to have a transfer switch to completely isolate the house wiring from the grid when the generator is connected.

This is also why V2G won’t be allowed to happen at just any 120-volt or 240-volt plug, though this is not the only issue with ‘plug-in-anywhere V2G’.

Technology

There are no Level 2 V2G EVSEs on the market today (February 2024) (The Ford F150 Lightning V2H package is not the same as V2G; defining scenarios correctly is important.) KWh-based metering is not permitted in most jurisdictions for EV charging (though it could come), let alone for measuring power in the reverse direction, which would likely have to take into account Time-of-Use (TOU or interval) pricing. (Which brings up the potential for rate regime arbitrage, which is a real can of worms.)

Electric utilities are quickly adopting large batteries on their networks for a variety of reasons:

Those are reasons utilities are already buying big grid-support batteries, before V2G is even a real product. Grid-connected batteries also have another huge advantage over EVs as a power source – they don’t get stuck in traffic at electricity demand rush-hour. They also don’t cause a potential backfeeding problem, or require massive investments in upgrading electricity connection points to deal with 2-way power flow.

So far, EVs don’t come with the ability to meter and record how much electricity they provide to an external load. Without that, the EV owner has no way to report how much electricity they supplied to the V2G customer (utility). The owner may also want the ability to control how much their battery can be discharged (e.g. not below 60%) or what their minimum price is to want to sell that electricity. Those functions are not yet available in EVs, and a data-logging power-metering function sufficiently accurate and robust for financial purposes will definitely add a cost to the vehicles.

If and when that functionality does arrive, it will have to include clock synchronization between the grid’s clock and the vehicle’s clock, to a sub-second level of accuracy for financial reconciliation purposes. This is because utilities will set start and end times for accepting the power from vehicles (will only happen in critical conditions), and because prices will likely change at interval pricing change-point times. To date, the charging signal protocols do not provide time-of-day data. If they do in the future, will vehicle owners accept the grid changing the time on their vehicle’s internal clock? That would be unhelpful for someone who crosses a time-zone boundary.

Most EVs made today (2024) do not come stock with the ability to provide AC electricity to an external load.

Some homeowners also recognize some of the benefits of battery storage, and are installing home battery systems (e.g. Tesla PowerWall). Those batteries are a better option for utilities to harness than EVs, because these batteries are stationary and homeowners might be prepared to offer more of their capacity at times of peak demand (not at times of major outages). These batteries can also store household energy production from solar panels, small wind generation, stand-by generators, etc. Being stationary, these batteries have a known address for billing and revenue purposes, is known to the utility as a potential live power point (backfeeding risk), and the power flow is already metered by the utility.

Plug-in hybrids could conceivably opt into a V2G arrangement. However, if the power draw is significant, the fossil fuel engine may be called on to keep the smaller vehicle battery charged. From an environmental and health perspective (e.g. vehicle parked indoors), is this a desirable scenario? Is it a good financial option for the vehicle owner paying for the liquid fuel? How is available energy capacity in the vehicle to be measured when it is a mix of battery charge and fuel in the tank?

Given the need for vehicles and the grid to communicate, there will be protocols (simple as possible) and data exchange, likely via queries. This opens the door to a possible cyber-attack on the grid from malware installed on the vehicle, and there is plenty of evidence that Internet of Things (IoT) protocols are historically designed to favour simplicity over security and are used to crack devices and databases. That’s a big risk for a utility, given the low off-setting potential reward.

Related breaking news - 2024.03.12: How EV Charger Hacking Threatens Personal Data and the Power Grid

In short, the cars aren’t ready, the EVSEs aren’t ready, the utility connection points aren’t ready, the utilities aren’t ready, and there are better and easier distributed storage options to tap. That’s a lot of inertia to overcome.

Reality – How EVs Actually Get Used

I feel qualified to speak to this topic as I have built, refitted, converted and used road (and off-road) EVs since 1979, typically as daily drivers for commuting, running local errands, and occasionally for inter-city travel. I know what they can do, and have done it for decades.

Most EVs (due to the perception of limited range, and because short trips are the great majority of road vehicle missions) are used for commuting and errand-running. This means they typically spend about half their on-road time at the start or end of the ‘work-day’. For many, this means 30-60 (or more, sigh) minutes on the road in the 5:00 to 7:30 p.m. window, when the daily electricity demand is typically at its peak. In other words, at the time the electric utility is most likely to make the call for that power from an EV, the EV has a high probability of being stuck in traffic and unavailable to provide that power.

Most privately owned EVs do most of their charging at night when the vehicles are parked for 8 hours or more, the owners are sleeping, and electricity rates (Time-of-Use pricing) are lower. While there is a lot of hype over the installation of high (50 kW) and very high (up to 350 kW) charging stations, the reality remains that about 80% of EV charging is done at home at night (much cheaper electricity), despite the hype around satisfying the gas-and-go mindset of many drivers who have never known anything else.

Financial & Economic

The supposed reason that utilities want V2G is that batteries are very expensive, so better to let vehicle owners pay for the batteries, and just rent the service very infrequently. However, the battery prices (per kWh of storage) continue to fall at almost a Moore’s Law rate.

People who own batteries, in EVs or not, understand that they degrade with time and use. If they are going to put extra cycles or deeper discharges on their batteries to support V2G, they will expect some compensation for that, on top of repayment for the electricity they already paid for to charge the batteries. So far, the pricing models are not very attractive for EV owners, especially if the call for supply only comes a few days a year, and without a full day’s notice.

Utilities can buy batteries a lot cheaper than EV owners on a price per kWh basis due to the ability to use heavier technologies than are appropriate for EVs (e.g. flow batteries), economies of scale, and the utilities have a much stronger ability to use them to capacity on a regular basis to maximize return on investment.

Finally, there is a financial reporting problem that nobody else is talking about: reconciliation and billing. If the vehicle owner sells 10 kWh of electricity to the utility in response to a 2-hour call for supply (worth about $2 to $3 at peak demand prices) while plugged in at a parking lot where they work, how will they be able prove they provided that power? How will they submit a bill to the utility for that electricity? Why will the utility believe their claim? Who is going to make the big investments across the whole local utility grid to accommodate this supply which could appear at any outlet? Suppose there are 10 calls for supply in a year, and the typical power supply sale from an EV is $4. Who is going to make any investment for a possible $40 annual gross revenue? If the car is parked at home at the time of the rare utility call for power, will the EV owner be satisfied with a simple net-metering price, which does not cover the cost of battery depreciation, only the price of the electricity?

I have a solid sense of how complex this kind of inter-party reconciliation, financial records data exchange (separate from and parallel to the physical charging control communications), billing and payment processing is, as I was a key team member in building two such systems for the Canadian telecom sector. Don't forget the implications of time-of-use pricing, surge pricing associated with an electricity shortage emergency, and ugly details like daylight savings time changes and time-zones in specific cases which will need to be accommodated. Y2K was easy by comparison.

The economic justification for V2G just isn’t there. That’s why it’s not coming to an EV near you anytime soon, or ever.

For the Win: H2G + S2H + HB (V2H optional)

Because intialisms are so much fun for the V2G crowd, I figured I would make up a few more so they can understand a more likely path forward, and because it's more viable, it will be the end for V2G.

H2G is House to Grid
S2H is Source (e.g. solar, wind, microhydro) to House
HB is House Battery
and V2H was previously defined as Vehicle to House.

In many jurisdictions, net metering - where a homeowner gets PAID (or more likely receives credits to a cap) for power they supply to the grid, is already a reality. Nothing new needs to be invented. No new metering, reconiliation, billing, or payment mechanisms or systems are needed. That's House 2 Grid (H2G). [Actually, in Ontario, a second power meter is required by the utility to keep the flows in each direction separate for their recording purposes. Some other places use smarter gear, and only one meter is required.]

In some places (like Ontario), net metering connection is allowed only if the homeowner is generating power (read photovoltaics), which prevents the potential for peak shaving electricity price arbitraging. That local (aka 'distributed') generation is Source to House (S2H). Installing local generation from renewables, primarily photovoltaics in urban areas where most of us actually live is a solved problem with a healthy for-profit industry delivering it. Investment required, but no new solutions are needed.

With both of those in place (S2H + H2G), the homeowner can qualify for a net-metering connection with the local electric utility (aka Local Distribution Company or LDC). Which means the homeowner can earn some bill credits when the local generation source is producing, and only to the extent it is producing, but not when electricity pricing (supposedly a signal for when grid demand is at maximum) is highest. That is potentially a misalignment of resources to market demand, which California is now experiencing at high solar output times.

There is a solution for this misalignment: enter the House Battery (HB).

The House Battery allows the homeowner to collect renewable energy when it is being produced (which is still in the control of Mother Nature along with daily solar cycles and weather patterns), and then sell it to the grid when the price is at the highest, assuming a connection agreement with the LDC (such as net metering, microFIT or similar).

One caveat to watch for is the actual connection agreement wording around how 'payment' is calculated and remitted. Generally, if there is a time-of-use (TOU) pricing regime, payment will be based on the TOU price at the time the power is supplied multiplied by the amount of power being supplied, and not just on the amount of energy supplied. In other words, a kWh at 5 p.m. is worth more money than a kWh at 5 a.m.

A potential catch is that the LDC may not actually provide a monetary payment where the homeowner provides more dollars worth of electricity than they consume, offering either a forward credit or simply zeroing any positive balance (from the homeowner's perspective) on a periodic basic (usually annual). In that scenario, the homeowner considering adding a generation source may want to size it to be slightly less than net-zero so they don't overproduce and end up subsidizing the local electric utility. (Policy-makers take note: if you want homeowners to contribute to net-zero at the community scale, you need to take away the current disincentive of penalizing 'overproduction' at the household level.)

However, sizing the battery doesn't necessarily follow the same logic, as it provides functions beyond storing electricity for sale on the daily cycle. Those functions will vary from homeowner to homeowner, and required individualized calculations beyond the scope of a general case document like this one.

This is an arrangement (S2H + H2G) the LDCs and major utilities like.

• the utility doesn't pay for the upgrades so the EV / homeowner can supply electricity to the grid (generation or storage)
• the utility can control how much home-based supply there is via the connection permitting process
• the utility doesn't have to worry about the actual EVs; those are invisible to the utility; they just see the house electric connection
• the utility has a known billing address for a known physical address - their decades-old business model
• the utility never has to pay actual money to the household power supplier; it's all handled via credits
• the utility gets free electricity if the supplier provides more power (measured in dollars, not kWh) in a year than it consumes from the utility
• the utility can avoid in-house purchases of some generation and storage if household suppliers provide enough power in aggregate
• the utility knows the addresses where it can expect to find active generation (backfeeding)
• the utility doesn't have to worry about EVs feeding the grid at uncontrolled or unexpected points

And, that's why we won't get V2G as originally envisaged, but instead S2H + H2G (with HB and EV optional).

Water Savers | Econogics Blog | Products and Services | Electric Vehicles | Reducing Your Expenses | Personal Energy Plan | The Emperor's New Hydrogen Economy

This website is powered by renewable energy.
Return to Econogics Home Page
All material on this Web site is copyrighted by Econogics, Inc. (unless otherwise noted).
This Web site created, maintained and sponsored by Econogics, Inc.
Comments to: Webmaster are welcomed.