Electric vehicle owners could earn thousands by supporting power grid

At least 90 per cent of the electricity generation being built today is renewable. But solar and wind farms produce electricity only when the sun is shining and the wind is blowing, so the power supply will fluctuate more. A pilot project in the US state of Delaware has shown that owners of electric vehicles (EVs) could make thousands of dollars each year by allowing their parked cars to serve as part of a giant collective battery that stores electricity when there is high supply and distributes it when there is high demand.

Some data suggests that the average EV is driving as little as 5 per cent of the time. Otherwise, it is often parked and plugged into the grid. This means that, rather than building giant battery farms, electric companies could balance the grid by drawing power from these cars when usage peaks in the morning and evening, then recharging them during the day, says Willett Kempton at the University of Delaware, who led the project. EV owners could sell electricity at a premium while still saving the grid money.

“An electric vehicle plugged in 95 per cent of the time that it’s not driving can provide storage for the grid at about one-tenth the cost of building batteries,” says Kempton. “[That could] help increase the reliability of any electric system and increase the capability of us to put more and more renewables on the system.”

In the project, four Ford EVs owned by energy company Delmarva Power were retrofitted to supply electricity back to the power system through vehicle-to-grid (V2G) charging. Kempton and his colleagues monitored their V2G charging throughout 2025. Given the amount of electricity the cars supplied to the grid, each EV could have earned as much as $3359 annually if that energy was sold at the market price.

When Kempton became one of the first to investigate V2G back in 1997, it made so much sense that he thought it would become a commercial reality within a few years. But almost 30 years later, V2G largely exists in a handful of test programmes in the US, Europe, Japan and China.

A key reason for this is that reversing the flow of energy from the grid to the car turns out to be surprisingly complex, because it requires vehicle-makers, utility companies and governments to change how they approach EVs, says Kempton.

The biggest issue is that power grids run largely or exclusively on alternating current (AC) electricity, while most household devices, including EVs, convert that AC to direct current (DC) electricity when they draw energy from an outlet. For an EV to supply the grid, the energy needs to be converted back to AC.

Doing that without electrocuting anyone requires V2G components to be built to a safety standard. The simplest way to set up V2G currently is to install a wall charger that converts DC to AC under standards designed to allow solar panels to feed into the grid. A few car companies, including Volkswagen and Nissan, have been offering wall chargers that do this in some markets.

But those wall chargers can cost thousands of dollars. So companies including Tesla, BYD and Renault have started developing EVs that convert DC to AC inside the car itself, and Kempton and others have been working on new safety standards for AC chargers. If that technology becomes widespread, it could enable V2G while adding only a few hundred dollars to the cost of the car, says Kempton.

As things stand, there is a rivalry between DC V2G like Volkswagen’s and AC V2G like Tesla’s. This is similar to the format war between VHS and Betamax videotapes in the 1980s, according to Alex Schoch at UK electricity retailer Octopus Energy. Betamax offered better quality, similar to DC chargers, which are more efficient. But VHS players were far cheaper, like AC chargers, and VHS eventually dominated the market.

“Our view is there’s a period of time where the market can deal with two different standards, but to really scale and get to mass-market, you’ve got to align on one,” says Shoch. “We’re firmly team … AC.”

But for drivers to want to spend even a few hundred extra dollars on a V2G setup, there needs to be a buyback tariff that will allow them to make money supplying energy to the grid. In 2024, Octopus launched the UK’s first V2G tariff, although for now there are few car owners that can take advantage of it. To that end, it has also partnered with BYD to allow consumers to lease a charger and electric vehicle equipped for AC V2G.

“Many manufacturers, the EVs they’re putting on the road are V2G capable, or the next generation that are hitting the road today or tomorrow will be,” says Schoch. “And you [will] suddenly have gigawatts of capacity that’s distributed all over the country.”

V2G adoption could help balance the demand and supply on the grid in real time. But as more EVs with V2G chargers start plugging in, it will also put more strain on the existing electricity system. As a result, V2G will probably force countries to upgrade their power grids.

A recent study calculated that it would be more cost-effective for countries to upgrade their grids all in one go, rather than upgrading them little by little as V2G gradually increases. Nations should “prepare the power system at a very early stage” for the coming V2G revolution, according to the study’s lead author, Liangcai Xu at the National University of Singapore.

“I was surprised because I thought V2G can be a silver bullet, it can solve everything,” says co-author Ziyou Song, also at the National University of Singapore. “[But] the gap is kind of significant. We have to upgrade our power system decently [so] we can facilitate so much electrical-charging demand.”