Vehicle-to-Grid Revenue Estimator

Why Vehicle-to-Grid Programs Are Gaining Momentum

Electric vehicles are batteries on wheels. As adoption surges, utilities and aggregators are courting drivers to unlock the latent storage inside parked cars. Vehicle-to-grid (V2G) programs pay owners for discharging energy during peak demand and for standing by as flexible capacity. The concept is compelling: the grid gets fast-responding resources, drivers get paid, and society squeezes more value out of existing assets. Yet behind the headlines is a practical question every driver asks: How much money can I actually make, and does it cover extra battery wear and tear? This calculator answers that by combining arbitrage revenue, capacity payments, degradation costs, and program fees into a single annual cash flow view.

Most V2G pilots today offer two compensation streams. The first is energy arbitrage, where your vehicle charges when electricity is cheap and discharges when prices spike. The second is capacity or demand response payments, which pay you simply for promising availability at certain hours. A third stream is emerging for grid services like frequency regulation, but those markets are often bundled into capacity payments. With dozens of pilot programs launching across North America, Europe, and Asia, the parameters vary widely. By entering your local tariffs, contract terms, and vehicle limits, you can test different scenarios and spot the tipping point where V2G participation makes sense.

Key Inputs That Shape V2G Earnings

The battery capacity and usable state-of-charge window determine how much energy you can reliably bid into programs. To maintain daily driving needs and battery health, V2G aggregators rarely use 100% of the pack; 60–80% is a common range. Round-trip efficiency captures losses during charge and discharge, typically 85–90% for modern EVs. Prices for charging and discharging should reflect your actual time-of-use plan and the guaranteed or historical discharge rates in your program. Dispatchable power defines the maximum kW your onboard charger or bidirectional wallbox can deliver, which affects capacity payments.

Cycles per week capture how often the program expects a full discharge. Some schemes are event-based with only a handful of activations per season, while others schedule daily cycling. Program months per year allow for seasonal shutdowns or travel. Availability factor reflects the percentage of events you expect to participate in after accounting for trips, maintenance, or unexpected needs; penalties usually kick in if you dip below contracted thresholds. Finally, the calculator subtracts degradation costs using a per-kWh estimate. Battery researchers often peg incremental wear at five to ten cents per kWh for high-quality lithium-ion packs when cycling within a moderate window. Enter your own estimate or consult vehicle warranty terms to refine this value.

The Math Behind the Estimator

The calculator computes energy throughput from the product of usable capacity, efficiency, and cycles. It then multiplies throughput by the spread between discharge compensation and charge price to find arbitrage revenue. Capacity payments are calculated by multiplying dispatchable power by the per-kW monthly rate, adjusted for availability and participation months. Degradation costs apply to total throughput, while fixed costs capture subscriptions, bidirectional charger leasing, or aggregator fees. The resulting net revenue shows whether your EV earns more than it costs to participate.

In this expression, Pcap represents capacity payments, Earb denotes arbitrage revenue, Cd captures degradation cost, and F covers fixed program fees. Each component is detailed in the explanation below the results so you can validate assumptions.

Worked Example: Urban Driver with a 77-kWh EV

Suppose you own an electric crossover with a 77 kWh battery. You enroll in a V2G pilot that lets the aggregator use 70% of the pack, equivalent to 53.9 kWh. Round-trip efficiency is 88%. Your time-of-use rate charges $0.11 per kWh at night, and the program pays $0.23 per kWh when it pulls energy back into the grid. The bidirectional charger can discharge at 7.2 kW continuously. The contract anticipates three full cycles per week, twelve months per year. You plan to be available 90% of the time, accounting for vacations. The aggregator pays $6 per kW-month for capacity and charges $120 per year in platform and hardware fees. You estimate battery wear at five cents per kWh.

With these inputs, energy throughput equals 53.9 kWh times 0.88 efficiency times three cycles per week times 52 weeks, yielding roughly 7,380 kWh per year. Arbitrage revenue is that throughput multiplied by the $0.12 spread between discharge and charge prices, for $886. Capacity revenue equals 7.2 kW times $6 times twelve months times 90% availability, generating $466. Degradation cost is throughput times $0.05, or $369. After subtracting $120 in fixed fees, net annual revenue lands around $863. The simple payback on a $1,500 bidirectional charger would therefore be under two years, assuming the program lasts long enough and rates stay consistent.

Comparison Table for Strategy Tuning

Strategy	Cycles/week	Net Revenue	Battery Throughput
Baseline	3	$863	7,380 kWh
Weekend-only participation	1.5	$438	3,690 kWh
Higher spread (TOU + demand)	3	$1,310	7,380 kWh
Lower degradation cost (solid-state future)	3	$1,232	7,380 kWh

These scenarios show how revenue scales with usage and tariff spreads. If your program offers premium pricing for emergency events, bump the discharge compensation to see how infrequent but lucrative dispatches boost cash flow. Similarly, if you anticipate battery advances that reduce degradation costs, the tool reveals how much upside is unlocked.

Interpreting and Using the Output

Beyond the net revenue headline, pay attention to the implied number of cycles per year. Many EV warranties guarantee a certain percentage of capacity over eight years; if your V2G participation adds hundreds of cycles annually, you might accelerate degradation relative to standard driving. The calculator reports total kWh throughput, which you can compare with manufacturer specs. It also surfaces the breakeven spread between charge and discharge prices by dividing degradation plus fees by throughput, enabling you to negotiate better terms or wait for improved rate structures.

Export the CSV to share with fleet managers, homeowner associations, or school districts evaluating electric bus V2G participation. Because capacity markets can be volatile, rerun the numbers annually with updated prices. The tool is also useful for assessing stacked revenue streams like frequency regulation by adding their guaranteed payments to the capacity field or entering them as a negative fixed cost if they arrive as credits.

Limitations and Assumptions

The estimator assumes consistent participation and does not model travel schedules that might drop availability below contract requirements. It treats the charge and discharge prices as averages, so you may want to model different seasons separately. Temperature effects on battery efficiency and capacity are ignored, although extreme heat or cold can reduce usable energy. Degradation cost estimates are approximate because real-world battery aging depends on depth of discharge, temperature, and rest periods. Finally, tax implications are not included; some programs issue 1099 forms, so consult a tax professional. Despite these limitations, the calculator provides a grounded starting point for understanding vehicle-to-grid economics and advocating for fair program design.