As EV adoption continues to rise, it is not just the demand for electricity that is impacted. The shift to electric transportation also has implications for the oil and gas industries, with reduced demand for gasoline and diesel fuel. This, in turn, affects global oil prices and could lead to a decrease in the geopolitical power of oil-producing countries. Additionally, the move toward electrification creates new opportunities for the energy storage and renewable energy industries, as EV owners increasingly look to charge their vehicles with clean, renewable energy. The growth in the EV market is also driving innovation in battery technology, which could have implications beyond transportation, such as in home energy storage or grid-scale energy storage.
Analysts predict that a quarter or more of new cars sold could be EVs by 2030. At that rate, by the midpoint of the 21st century, over half the vehicles on American roads could be electrically powered. On the whole, the phaseout of fossil fuel-powered vehicles and the rise of EVs is great news for the environment, but it’s essential that the nation’s electricity grid is prepared to handle the demand of hundreds of thousands or millions of EVs. Current estimates say that if every American who currently drives a gas-powered vehicle switched to an EV, the result would be roughly a 25% increase in the amount of electricity the country consumes.
What does that huge spike in electricity usage mean? First and foremost, it means that electric rates are going to go up. When we talk about the likelihood of utility rate increases as a reason to go solar, it’s not just because of the overall historical trend of rising rates – it’s because of very practical reasons like the rise of EVs. Higher demand always means higher prices, and utility companies will have to spend a lot of money on grid upgrades – costs that they’ll inevitably pass on to customers.
The rise of EVs won’t change just the overall amount of electricity consumed, but will also change the dynamics of demand. Currently, peak power usage in most parts of the country occurs in the afternoon. However, if millions of people are getting home from their daily commute and then plugging in their EV’s in the early evening or overnight, that could change. The result could be an increase in utilities implementing “time of use” billing structures that charge a higher rate for electricity used during times of day when demand is at its peak.
Obviously, the transition to EVs will be a big win for the environment. But to maximize the positive environmental impact of the EV transition, the grid doesn’t just need to get bigger and stronger – it also needs to get smarter and cleaner. Even relying on a grid that produces electricity from fossil fuels – coal and natural gas power plants – EVs still produce lower net emissions than gasoline-powered cars. Getting the most planet-friendly potential out of the EV revolution, however, means ensuring that the extra energy needed by EVs comes from renewable sources like wind and solar.
One promising concept that could help alleviate the challenges posed by the increasing popularity of EV’s is vehicle-to-grid technology, which allows the batteries in the EVs themselves to work as backup storage for the electricity grid. Vehicle-to-grid uses EV chargers that communicate with the grid to measure demand for electricity.
The system could then send some of the energy in a parked EV’s batteries back to the grid to help handle high demand, while using settings determined by the car owner to ensure that the EV retains enough charge to be drivable when it’s needed. One major advantage of the concept is that vehicle-to-grid could utilize an ever-growing network of batteries that already exists in EVs, rather than requiring the construction of new energy storage infrastructure.
For EV adoption to have the maximum possible benefit to the environment with minimal disruption to the utility service, regulatory policies will have to be rationalized to reflect the capabilities of new technologies and clear barriers.
Even in California, usually one of the nation’s leaders for clean energy, adapting regulatory policies to the EV era is proving challenging. Lucrative time-of-use incentives reward Golden State EV owners for charging their cars at night when demand on the grid is low – but access depended on installing a redundant second meter to monitor EV energy usage, something most EV chargers are already capable of doing.
The state’s Public Utilities Commission recently made a new rule doing away with the redundant meter requirement for the state’s largest utilities – but solar customers still can’t participate, because of the technical complications of measuring how much energy an EV is receiving from the solar system versus from the grid. The Commission has pledged to look into this problem next year, but for now it’s a somewhat frustrating example of how policy progress is only being made in small steps.
Although there are technical and regulatory complications that will need to be addressed, there’s no question that solar-empowered homeowners will have an advantage in adapting to the EV future. There are several ways that the greater energy independence residential solar provides will pay off big as the popularity of EVs continues to rise.
First and foremost, going solar reduces the impact of utility rates that will inevitably rise due to demand and infrastructure upgrade costs from greater EV popularity. Going solar is effectively locking in many years of electricity production at a fixed price. The more utility rates rise as demand on the grid goes up, the more money you’ll save.
In addition to being less impacted by overall rate increases, solar-empowered homeowners, especially those who add battery storage to their solar installs, will also be less inconvenienced by utilities implementing time-of-use billing structures. Being able to use energy you generated and stored yourself when you need it means not having to worry as much about paying higher rates for using energy during times of peak demand.
Residential solar combined with battery storage also equips homeowners to ride out grid “growing pains.” Solar energy and battery backup is already an attractive option for homeowners who live in areas where severe weather or high demand on the grid causes frequent utility outages. If utilities struggle to upgrade infrastructure enough to keep pace with increased demand from EV adoption, temporary outages could get more widespread and more frequent – but solar-empowered homeowners will be able to get through any such disruptions with considerably less inconvenience.
The EV revolution is definitely coming. On the whole, that’s great news for the future of the planet we all share. Getting there won’t happen without some hard work and innovative problem-solving to overcome complications that arise along the way. The energy independence and cost savings provided by residential solar can do a lot to smooth out those bumps in the road.
If you are interested in learning more about residential solar power, or considering the addition of an EV charger or battery storage to your existing solar system, our team of highly-trained energy consultants is ready to assist you. By scheduling a consultation with us, you can gain a comprehensive understanding of the benefits of these technologies, and how they can help you prepare for the future of sustainable energy. Don't wait to take advantage of these innovative solutions – book your consultation today and start your journey towards a more energy-efficient future.