Encourage more demonstration projects by improving grant support and reducing administrative barriers to implementation.

Demonstration projects help assess the costs and benefits of second-life battery applications and can encourage more private investment if successful. Failure to improve the grant process could hamper California’s ability to gather the best information from the right companies. Agencies developing grant programs can reduce the overhead costs required to comply with grant processing needs.

Improve the quality and market relevance of second-life battery demonstration projects.

Separate automakers could join forces to prove through research that the batteries can be aggregated in isolation. The automakers could also collaborate on a project proposal description for agencies to consider funding, rather than attempting to fit a project into existing grant opportunities like for the Electric Program Investment Charge (EPIC) program at the California Public Utilities Commission.

Remove regulatory barriers to allow second-life battery pilot projects access to specific grid markets.

Grid operators like the CAISO impose various rules and procedures for connecting energy facilities to the grid system, which present significant barriers for energy storage technologies such as second-life battery pilot projects.

Offer tax credits, rebates, and other financing support for second-life demonstration efforts.

Public sector financial support, at least to cover part of the project costs, can make the difference in getting a demonstration launched. Given the uncertainties associated with second-life batteries, government can also pledge to absorb the risk of any low-quality assets discovered in the process of providing grid services or reducing greenhouse gas emissions.

Assign liability for second-life batteries to avoid stifling innovation and experimentation.

The government, with industry support, should clarify and remove liability for faulty second-life battery products in instances of third party reuse.

Commit to develop clear and consistent regulations over specified time lines.

As a long-term goal, policy makers should consider developing clear regulations on second-life batteries that businesses can rely on for an extended period of time. In addition, policy makers could help the market grow by coordinating the different regulations and timelines at multiple agencies affecting second-life batteries in order to ensure consistency and predictability for investment.

Fund an expert panel to inventory, monitor, and address the most pressing agency regulations that affect second-life battery deployment.

Either the California Energy Commission or affected industries can gather experts on regulatory policy to assess the current regulations, regulatory gaps, and projected future of regulation, as well as the regulatory needs, based on different models of asset ownership at various stages of use.

Ensure that grid-related incentive programs include second-life batteries as eligible.

California’s Self-Generation Incentive Program (SGIP) as well as the federal Investment Tax Credit currently do not include second-life or used batteries. These programs should consider allowing second-life batteries to qualify in order to ensure they face a level playing  field of incentives from competing energy storage solutions.

Ensure that carbon and grid regulations account for the potential of second-life batteries.

Policymakers should consider the multiple benefits that second-life batteries could provide. For example, policies to integrate excessive renewable energy generation should favor second-life batteries to absorb the surplus, and grid operators should change market rules to clarify that these batteries can participate.

Identify and replicate existing liability models for
automotive parts for application to second-life battery liability.

Numerous automotive parts are reused, refurbished, and repurposed for subsequent owners, sometimes in ways the original manufacturer never intended. In many cases, the manufacturer is protected through liability shields that limit damages being attributed to them in case of defects or accidents.

Develop technical performance standards for second-life batteries.

Industry groups can voluntarily develop safety and performance standards for second-life electric vehicle batteries to help address liability concerns. If codified in statute or regulations, then conceivably any automaker that complies with these standards in selling second-life batteries could be protected from liability for certain damages.

Seek policy, such as supportive legislation, to make the performance and safety standards the basis for liability protection.

The industry-drafted safety standards could form the basis for national legislation or regulations to support a second-life battery market. They can help ensure the industry maintains high safety standards and that companies that comply will bene t from increased protection from liability in case of damages.

Enlist the insurance market for assistance in developing liability coverage for the second-life battery market.

Insurance companies could provide coverage for businesses that want to enter the second-life battery market, but they may be concerned about their potential exposure. If insurance companies could help fund studies on the risks as well as the standards development, they might  find the market advantageous to enter.

Identify the type of data that is most useful for making second-life market decisions, based on classifications and promising applications.

Industry leaders, with public sector support, may need to engage in a broader effort to track and collect data on battery performance. They will also need to experiment with different applications, from large utility roles to home- and commercial- scale uses, building data sets on the most promising particular use cases.

Make available battery register data from first-life uses.

Second-life batteries can only function well if the new owner understands the condition of the batteries from the first life usage. Second-life battery customers will want to see the data on incoming assets and know how the batteries performed and were treated in their  first usage. They will then need to know how this history would affect deploying them in their second use. The automakers collect much of the data and could make it accessible.

Make available utility, government, and grid data to help industry actors understand promising second-life revenue opportunities, via an accessible database with incentives for participation.

State leaders will need to develop incentives and processes for entities to collect the battery energy data. State leaders should use incentives to encourage otherwise reluctant utilities and automakers to participate in data collection, possibly by starting with a strictly volunteer offering of whatever data and sources might be most easily made available. State leaders can then work collaboratively with these entities to  find a method to divulge more data.

Focus on collecting data from second-life battery pilot projects and fund data collection efforts from them.

State leaders should ensure that they receive and collect data from pilot project operators who have control over the full project. Universities and national laboratories are engaging in this research, including for various applications like microgrids, and could make the data available along with their private sector partners. These pilot projects should be feeding information, results, and data back to a central statewide database.

Use data as a basis for reducing electric vehicle ownership costs by quantifying the monetary benefits of second-life batteries.

Based on favorable data from these models and pilot projects, the California Public Utilities Commission should consider allowing electric vehicle automakers or customers to monetize the residual second-life battery value upfront to reduce purchase costs or monthly charging costs. That effort would help turn data into upfront value that could boost electric vehicle deployment.