Electric vehicle sales will be largely influenced by advances in battery technology and the rollout of charging infrastructure. But these technologies will become even more intertwined going forward as the proliferation of electric vehicles may foster demand for batteries as local energy storage.

Many consumers who park a Volt, Leaf or other plug-in EV in their garage will notice a bump in their overall electricity cost because EVs can increase monthly consumption by 50% to 100%. This will lead many consumers to closely scrutinize their utility bills and look for ways to reduce their cost per kWh. Several utilities are launching EV-specific time of use rates to encourage consumers to charge off-peak.

Also drawing consumers’ attention to energy use will be the new applications from EV charging station vendors that enable consumers to track consumption, cost and carbon emissions reductions either online or via their mobile phones. As consumers realize that they can save money by charging off peak and get comfortable with lithium batteries, they will be primed to consider purchasing energy storage in the home.

Two charging equipment companies, AeroVironment and Eaton, are developing products that incorporate energy storage. In some areas with high energy rates and time of use pricing (such as California), electricity can cost 80% less overnight than at peak times. With even a small battery pack (say 1-2 kWh), consumers in these areas can greatly reduce their peak energy costs for their households.

Putting storage into the charger rather than using the vehicle for power to the home will preserve the life of the EV’s batteries and can capture cheaper energy even if the vehicle is not plugged in. (EV manufacturers have so far largely frowned upon V2G applications because of the potential impact on battery life.) Also, any surplus in solar power generated at home could also be captured. Storage batteries could be lithium ion (in the future from the vehicles after their useful life), as well as less costly nickel metal hydride or advanced lead acid batteries.

For commercial fast DC chargers, incorporating battery storage could be a way around impacting peak demand. In addition to also storing excess solar power, commercial customers could use the charger/storage system as emergency power and to similarly purchase energy when it is the cheapest and quick charge their fleets on demand without worrying about cost or impact on the grid.

Charging just one vehicle at this rate is equal to approximately 43 vehicles being charged via Level 1 (aka standard household current) or 9-18 vehicles at Level 2 using charging equipment. Complicating matters is that DC charging is by necessity immediate – delaying a 15-30 charge defeats the entire purpose. Plus, these charge locations are likely to be at truck stops, gas stations, or mini-marts, which aren’t places that most folks plan on spending a lot of time.

In our recent publication on Hybrid Locomotives, I helped develop baseline forecasts for 20 hybrid locomotives in North America by 2020. With the elections in the United States, it has come to my attention though that these numbers are assuming a very critical component to the forecast that may fluctuate more than we like think.

Railroads are one of the most regulated industries in North America. As a result, one of the key drivers of innovation in the locomotive market is regulation. Emissions regulations force railroad companies to examine potential alternative fuels and exhaust treatments. These regulations are currently driving any hybrid and battery locomotive work being done. However, railroad safety regulations are justifiably onerous and trump emissions when it comes to fuel and battery safety issues.

All of this makes sense, but I have heard rumors about a loophole which could be the undoing of the hybrid locomotive. In North America, the emissions from locomotives are required to be reduced to 1g/kWh of NOx and 0.015g/kWh of particulate matter in 2015. These requirements are going to require that diesel engines on locomotives have exhaust after treatments similar to diesel on-road trucks. Or maybe not.

The challenge that I’ve heard from multiple sources is that if locomotives and railroads cannot meet emission requirements, then they can push back against the regulations (or as bluntly stated in one conversation, railroads “can just ignore them, if they don’t like them”). The EPA, of course, does not subscribe to that line of thinking, but does admit that the railroads are very involved in the regulatory process to make sure the rules can be met. While this may sound like leaving a fox in the henhouse, it actually makes sense due to the many layers of regulations that railroads are subjected to. There is no point in making regulations if they cannot to be met.

These new coming regulations can likely be met for a cost and herein lies the politics. The generally conservative railroads are typically unlikely to experiment with expensive capital costs, if they can be avoided. Within North America, where carbon costs seem even less likely after this last election, hybrid locomotives will lose some of their appeal if traditional diesel locomotives do not have to meet the challenging emissions requirements.

I remain optimistic that the market is likely to beat our baseline forecast, and the emission regulations will help push new innovation towards hybrid locomotives. The momentum towards greener locomotives has been growing and some railroad companies (Norfolk Southern in particular) are showing signs that their boards are willing to commit resources to develop new technology to meet these emissions rules.

I know this is usually a technical blog, but I need to reflect on this day about an important personal anniversary. It was on November 17, 2000, when I drove my shiny new Prius off the lot at Burt Toyota in Englewood, Colorado, making me one of the first people in the Denver area to do so. I have that event to thank more than any other for the happy transition I’ve made in the decade since.

I had a relatively comfortable dot-com job in the summer of 2000, and thought it was finally time to trade in my 1990 Honda Civic. I narrowed it down to a Honda Accord Coupe and a few others, but I didn’t want to make any decisions until I learned more about this “new electric car” that I’d heard about from Toyota.

There was just one Prius at my local dealership when I arrived. They had the hood up, and I couldn’t believe how Toyota managed to cram two engines into a space barely big enough for just one. I took a test drive, and then went home to spend the rest of that night reading everything I could about this car and concept on the Internet (even though most Prius websites at that time were in Japanese!). Despite not usually wanting to be on the bleeding edge of anything, the car’s reasonable price, exceptional warranties, and use of its own momentum as an energy source made this an irresistible opportunity. The Prius was built-to-order back then, so putting down a deposit in August resulted in “my” Prius showing up three months later.

In addition to the usual pride of owning a new car, I was also fascinated with this new (for me, at least) hybrid technology. While I am still much more of a lead-foot than a hyper-miler (my wife regularly gets 5-10 mpg more in the Prius than I do without even trying), I still love how the car’s Consumption display turns all green after driving for a half-hour down a mountain pass at 100+ mpg. And while that is the case for most vehicles coasting downhill, I especially love how the computer turns off the internal combustion engine when idling, even though my lights, HVAC, radio, etc. are all still going strong. As the sacrilegiously funny TV show South Park once described: the smog around my car was soon replaced with a cloud of … smug!

More importantly, however, the Prius made me much more aware of environmental issues in general and energy issues in particular. As the dot-com bubble burst, I began my career transition away from traditional IT to what I then called sustainability issues. In hindsight, I’m sure I could’ve been more successful – or at least quicker – in this transition, but my pestering the National Renewable Energy Laboratory in west Denver, volunteering and later working for the Colorado Renewable Energy Society, and other efforts finally led me to Pike Research. And while I may occasionally be called an “energy expert” by some in the Denver mainstream media, I now prefer to promote the work of actual energy and cleantech experts like Pike Research’s industry analysts.

After 10 years and over 140,000 miles of torturous driving, my Prius is still going strong. I’m also proud of other things that have happened “as a result” of my car-buying decision. I gave countless rides to people who were equally fascinated with hybrid technology, and at least 3-4 of those people told me they bought their own Prius or other hybrid in part thanks to that ride. Toyota’s next version of the Prius would win multiple Car of the Year honors (and hopefully they’ll get back to that level soon!).

As for Burt Toyota: founder LG Chavez recently sold his network of traditional dealerships to focus primarily on electric vehicles and other cleantech concepts.

I continue to give occasional presentations about my Prius experience and my own industry analyses, although they usually morph into more pointed discussions about Peak Oil and other resource-limitation issues. While much of cleantech appears to be driven by the fight against Global Warming and other “tailpipe” issues on the back end, I remain far more concerned with the increasing physical, economic, political, and other constraints placed on our natural resources. Either way, I feel as hopeful as ever about the cleantech industries that have emerged in the decade since I took a chance on that new electric car from Toyota.

Thanks again to Toyota for betting on hybrid technology, and Happy 10th Birthday to my beloved PvH Prius. You’ve got a wash, winterization, and maybe even some detailing coming your way!

We can thank the arrival of the Toyota Prius, Al Gore, and a few summers of flirting with $4 gas prices for the current rise in consumer interest in vehicle efficiency and reducing emissions. While every year the vehicles – hybrids and ICEs alike – get more efficient, the 2010 crop of plug-in vehicles will be accompanied by new tools that help drivers to further shrink their consumption and footprint to ballerina size.

Intelligence built into the vehicles and charging equipment as well as web and mobile applications will enable EV owners to stretch their electric miles, enhance driving comfort, and minimize their cost of driving. Nissan recently announced that its Leaf EV will include an information system powered by software from Microsoft. (In a move that may not be surprising to the IT community, Microsoft has already announced a newer version of its Windows Embedded Automotive software, so it’s already outdated.)

In the vehicle and through their mobile phones, drivers will be able to view nearby charging stations, see their remaining miles, pre-warm or cool the car, and start or stop charging on demand. As part of its Information and Communication Technology system, Nissan has developed web applications for tracking charging history, estimating carbon reductions, planning routes to optimize electric miles, and electricity costs. This new field of green telematics will offer a significant benefit to fleets looking to slash fuel consumption.

Nissan is the second EV customer for Microsoft, which began working with Ford on its Focus EV. GM, Mitsubishi, and all of the other auto makers that will be releasing plug-in vehicles will provide similar tools for drivers to extend the range of their vehicles and maximize their efficiency, like the hybrid “hypermilers.”

Canadian company CrossChasm has developed a hardware/software combination that tracks the real world driving data of individual vehicles and drivers to estimate savings if the driver were to switch to hybrids or EVs. This sensitivity to efficiency and emissions has reached the proverbial “tipping point” and will only grow more important as fuel prices go higher.

Plug-in vehicles will send data about charging to servers hosted by their automotive companies, which are likely to share the aggregated data with utilities to help them adapt to the increased energy demand.

Established IT companies like Microsoft, SAP, IBM and Oracle are likely to be among the winners as data from vehicles and charging equipment begins pouring in. While utilities aren’t expecting their ability to meet the increased demand from plug-in vehicles to be impacted in the next 18-24 months, when significant numbers of plug-in vehicles are on the roads, they will be looking to manage EV charging to prevent increases in peak demand.

Pike Research’s recent report Electric Vehicle Information Technology Systems projects that investments in EV IT (spanning utilities, automakers, and charging equipment, and everything in between) in the U.S. will reach $371.9 million in 2015.

Just as IT revolutionized commerce and banking, they will be driving the change in the automotive and utility industries (via smart grid upgrades). It’s about time.