Looking for Microgrids with PEVs? Try California

Dec. 10, 2014
Microgrids with PEVs are often pictured as the local energy model of the future. It looks like California — in pursuit of both microgrids and PEVs — could lead the way.

Microgrids with PEVs are often pictured as the local energy model of the future. It looks like California — in pursuit of both microgrids and  PEVs — could lead the way toward that future.

California is well ahead of the rest of the nation in putting PEVs, or plug-in electric vehicles, on the road. Five out of a 1,000 vehicles in California are now PEVs, according to data released today by the Energy Information Administration.

About half of the PEVs in the U.S. can be found in California, which offers rebates of up to $2,500 for EVs that run only on a charge and $1,500 for plug-in hybrids that also use gasoline. The market receives an additional boost from a federal tax credit of $2,500 to $7,500, depending on battery capacity and vehicle weight.

Nationally, PEV use has grown from 0.4 percent of new vehicle sales in 2012 to 0.7 percent so far  in 2014. In all, about 70,000 battery EVs and 104,000 plug-in hybrid EVs are on the road out of the 226 million registered vehicles in the U.S. The  West Coast, in general, dominates the EV market. (See map below.)

California offers rebates of up to $2,500 for EVs that run only on a charge, and $1,500 for PHEVs, which can also run on gasoline. Other states the EIA lists as offering EV incentives are:

  • Washington has exempted EVs from the state’s 6.5 percent sales and use tax. However, the incentive does not apply to the purchase of plug-in hybrids. While plug-in hybrid ownership is higher than that of EVs for the United States, the reverse is true in Washington.
  • Georgia offers a zero emissions vehicle (ZEV) tax credit of 20 percent of the cost, up to $5,000. ZEVs include vehicles powered by electricity or hydrogen fuel cells.
  • Maryland offers a tax credit of $125 for each kilowatt-hour of battery capacity of an EV, up to $3,000. Many EVs have a battery capacity sufficient to obtain the full credit. Plug-in hybrid EVs have a lower capacity and therefore secure a lower credit; the state estimates that a consumer purchasing a plug-in Toyota Prius would get a credit of $550.
  • The District of Columbia has a tax credit of 50 percent of the incremental cost of an EV, up to $19,000. The District also exempts EVs from its excise tax, which varies from 6 percent to 8 percent, depending on vehicle weight.

In addition, EIA notes that some electric utility utilities offer special electricity rate incentives for PEV owners to encourage vehicle charging during off-peak hours, generally in the evening.

For instance, DTE Energy in Michigan offers customers discounted electricity rates at off-peak hours if they install a 240-volt Level 2 charger, which powers a PEV more quickly than a 120-volt Level 1 charger. The ratepayer must also install a separate meter dedicated to the PEV. Customers also have the option of paying a flat $40 monthly fee for charging, according to EIA.

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California rules favoring PEVs are likely to spur additional growth in the state, as well as other states.

California’s ZEV mandate requires that 15 percent of all new light-duty vehicles sold in the state by 2025 be either electric or fuel-cell powered.

Nine states have agreed to follow California’s ZEV mandate: Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont. These ten states represent close to one-quarter of the U.S. light-duty vehicle market.

Interestingly, several of these states also are pushing for more microgrid development. So watch these states, as well as California, for an increasing number of pilot microgrids that include PEVs for energy storage, demand response and other grid services.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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