General Motors (NYSE: GM) and PG&E (NYSE: PCG) are partnering on a pilot program to test the viability of using EVs as a backup power source in California. The companies will test vehicles that have bidirectional charging technology that can be used to power homes in an effort to reduce emissions and provide a backup source of power during outages which have become frequent in California.
It's a reflection that the most valuable and costly part of an EV is the battery. A battery that can drive for more than 250 miles as is common in most EVs means that it can hold a massive amount of power. Cars are charged during off-peak hours and can help the grid meet its needs during on-peak hours. Given that people pay thousands of dollars for generators, this would give additional value to EV owners.
PG&E and GM will begin their pilot program this summer after an initial period of lab testing. At first, it will ensure that the vehicle to home connection is working fine in terms of safety. Once this is established, then the program will develop the right software and UX interface for a user-friendly experience.
The pilot program will include the use of bidirectional charging technology and software that will manage the flow of electricity from a charged EV into the customer's home and automatically find the right mix between the home, EV, and PG&E's electric supply. The hope is that larger trials can begin at the end of the year.
California has been a pioneer in terms of lowering emissions, increasing gas mileage, and EVs. Since California is such a large market, automakers have no choice to abide by these regulations which end up becoming the standard for the industry.
Currently, in California, transportation accounts for 40% of the state's greenhouse gas emissions. EVs lead to much lower emissions and none of the electricity is generated by renewable sources. The state is targeting 2035 when all new car sales will be zero-emission vehicles.
EV adoption is a bit of a chicken or egg game. The more people that buy EVs, the more infrastructure is built, and supply chains are bolstered which brings down costs and improves the economics of ownership. Of course, a lack of infrastructure and higher costs reduces demand. If EVs can have multiple uses as a generator and backup power source, then this could increase EV adoption sales. Already, 20% of EVs are in the United States are in California. The state also boasts the cleanest mix of power generation with 93% of PG&E electricity coming from renewable sources.