Hybrid electric vehicles are becoming a common sight in many parts of the country. More exciting, though less discussed, is the emergence of the hybrid vehicle’s cousin: the plug-in hybrid electric vehicle (“PHEV”). PHEVs are similar to traditional hybrids in that they combine an electric motor with a gasoline engine, but they also feature a larger externally charged battery. This battery allows the PHEV to operate as an electric car for as many as forty miles, until the battery is depleted, at which point the car operates as a traditional hybrid until recharge. PHEVs are a critical and palatable technology bridge between the hybrid and the electric vehicle, able to derive a substantial fraction of driving miles from grid-derived electricity, without the range restrictions of pure battery vehicles.
One of the most compelling advantages that PHEV boasts over other alternatives is its ability to draw from a diverse mix of energy sources. This offers flexibility and, if developed with technology such as vehicle-to-grid, described below, could help drive the market toward some of the cleanest sources of power available. Plugging vehicles into the grid allows for a transfer of benefits from future developments in energy efficiency and new technologies to the transportation sector without having to overhaul design or infrastructure.
PHEVs also boast exciting potential in the stationary clean energy development landscape. Because of the digitized nature of the PHEV’s connection to the grid, PHEVs can provide “demand response” services for the grid by coming off-line. At peak periods, this is a critical service for the grid; “[c]alling upon reductions in demand is much less expensive for utilities and cleaner than ramping power plants up and down to follow load fluctuations.” The emerging development of vehicle-to-grid, or V2G, technology uses the excess battery storage capacity of plugged-in PHEVs to provide the grid with power when peak demands are high. The car batteries then recharge when peak demands on the grid are low. Although the first round of PHEVs will not have this two-way capacity, it is one of the most promising marketing aspects of the PHEV, which carries a steep price tag due to the high cost of the required battery. In addition to putting cash back into the consumer’s pocket, V2G provides a valuable service to the grid as a distributed resource. The inability of intermittent power sources like solar and wind to provide baseload services—the grid’s minimum requirements to provide energy 24 hours a day, 365 days of the year—has been one of the major stumbling blocks for large-scale development of clean energy sources. Moreover, without a system of storage, energy produced at off-peak times, such as the wind blowing at night, is less valuable. Having a large pool of distributed battery storage attached to the grid is unprecedented, and could provide the necessary linchpin for moving renewable energies away from the margins of energy generation.
Many of the obstacles and related proposals for the future of large-scale PHEV adoption are related to investing in research and development of batteries and attempting to find ways to lower the cost of PHEVs, which is a major barrier to adoption. These efforts to ready America’s infrastructure and market to receive PHEVs are worthy proposals and, if not already adopted, should be seriously considered by Congress and the President. It is equally important, however, that in the rush to move PHEVs into the market, policymakers also envision the next wave of possibility for PHEVs, and ensure that potentially fruitful opportunities are not unintentionally thwarted. Given the high upfront cost of PHEVs, V2G technology, even if not viable in the first wave, should be at the forefront of automakers’ and policymakers’ minds and they should design the system to accommodate this technology. V2G can help make consumer car payments more manageable if the PHEV is producing returns on their monthly electric bills. To that end, incentives aimed at installation infrastructure should require or at least prioritize two-way connections that would allow outgoing power flow back to the grid, in addition to incoming flow to charge the PHEV.
On the cusp of the introduction of the first commercial PHEVs, many questions remain about how transformational this technology will be for the American transportation system. By investing now in infrastructure and regulatory frameworks that support V2G technology, we can preserve the vast potential of PHEVs to adapt and grow to meet our future energy needs.
 Ronald E. Minsk, Sam P. Ori, Sabrina Howell, Plugging Cars into the Grid: Why the Government Should Make a Choice, 30 Energy L.J. 317, 355 (2009).
 Grid-derived electricity, even when powered by “dirty” sources such as coal-fired power plants, is still a cleaner source of power for vehicles than petroleum, in large part because of the thermal inefficiencies of the internal combustion engine. See Elec. Power Research Inst. & Natural Res. Def. Council, Environmental Assessment of Plug-In Hybrid Electric Vehicles, Vol.1: Nationwide Greenhouse Gas Emissions (2007), available at http://mydocs.epri.com/docs/public/000000000001015325.pdf (finding that even in a modeling scenario where current coal technology was the sole source of recharging power, the PHEV had only slightly higher carbon emissions than a traditional hybrid vehicle and achieved a twenty-eight to thirty-four percent reduction in carbon emissions compared to the conventional vehicle).
 See id.
 Minsk et al., supra note 1, at 359.
 See id.
 Pac. Nw. Nat’l Lab., GridWise Demonstration Project Fast Facts 2 (2007), available at http://www.gridwise.pnl.gov/docs/pnnl_gridwiseoverview.pdf (studying the efficacy of demand response services with household appliances).
 See Annie Jia, Vehicle-To-Grid Technology Gains Some Traction, N.Y. Times, July 22, 2009, available at http://www.nytimes.com/cwire/2009/07/22/22climatewire-vehicle-to-grid-technology-gains-some-tracti-50378.html?pagewanted=1.
 See id. (noting that the vehicle line director for General Motors’ PHEV, Chevrolet Volt, seemed to think that V2G technology “is a far cry from commercialization”); Jon Wellinghoff, The CashBack Car in Plug-In Electric Vehicles: What Role for Washington? 65, 80 (David B. Sandalow, ed., 2009) (confirming that manufacturers cannot change manufacturing schedules for the first round of PHEVs due out on the market to include two-way V2G technology).
 See Wellinghoff, supra note 6, at 68.
 Id. at 69.
 See Clay Hamilton, Chu Says Wind, Solar Competitive With Coal in Decade, Smart Energy (Mar. 26, 2011), http://smartenergyshow.wordpress.com/2011/03/26/chu-says-wind-solar-competitive-with-coal-in-decade/. But see Dave Buemi, The Renaissance of Coal and the Base Load Myth, PV Advocate (June 14, 2010), http://davebuemi.com/2010/06/14/the-renaissance-of-coal-and-the-base-load-myth/ (arguing that planned shutdowns and unplanned breakdowns of fossil fuel plants make conventional “baseload” power plants just as unreliable as wind and solar).
 See Jia, supra note 5.
 See, e.g., Bracken Hendricks & Benjamin Goldstein, Federal Policy Options to Support Early Electric Vehicle Deployment by Reducing Financial and Technological Risks in Plug-In Electric Vehicles: What Role for Washington? 192, 192 (David B. Sandalow, ed. 2009) (advocating proposal to create a federal battery guarantee corporation to provide ten-year, 100,000 mile warranties on batteries for buyers), Daniel M. Kammen, Samuel M. Arons, Derek M. Lemoine & Holmes Hummel, Cost-Effectiveness of Greenhouse Gas Emission Reductions from Plug-in Hybrid Electric Vehicles in Plug-In Electric Vehicles: What Role for Washington? 170, 183 (David B. Sandalow, ed. 2009) (encouraging early adopters by providing tax incentives to purchase PHEVs), Tom Z. Collina & Ron Zucker, Electric Vehicles: How Do We Get Millions on the Road? in Plug-In Electric Vehicles: What Role for Washington? 208, 214 (David B. Sandalow, ed. 2009) (describing provisions in the Energy Independence and Security Act of 2007, P.L. 110-140, that authorized $90 million per year for five years to fund competitive grants to encourage the use of electric vehicles and PHEVs).