It was the best quote of a two-day conference, and it came toward the end, from the always-pithy Ed Kjaer of Southern California Edison. Speakers had waxed effusive over not just more hybrids, but plug-in hybrids, fully electric vehicles—and that was just for starters.

Imagine, they said, using vehicles with large-capacity batteries as adjuncts to the power grid for “ancillary services” like load balancing vehicle-to-grid services, then extending that so that cars become “cash-back hybrids” that would, in theory, actually make money for their owners in that capacity … and so forth.

Before thinking about other such uses for the battery packs in hybrid vehicles, Kjaer all but begged, “Let’s just get the batteries driving the wheels first!”

Which only underscores the challenges of integrating new and different forms of energy storage and motive power into a global ecosystem built around vehicles that have used only petroleum for 100 years. The conference, “Developing the Market and Infrastructure for Electric and Plug-In Hybrid Vehicles,” was held in late May in Troy, Michigan.

But then Kjaer veered in a different direction. Perhaps, he told us, the biggest initial impact of large Li-ion battery packs for hybrids and plug-in hybrids wouldn’t really be the cars; perhaps it might actually be on the world’s utilities. After all, remember: Today, there are only about 2 million hybrids in the “global car park” of 820 million vehicles—or far less than 1 percent. And there are fewer than 200 plug-in hybrids. But forecasts predict far greater numbers, and that requires one thing: Mass production of high-capacity battery packs.

“Energy storage is the game changer,” he said—and widespread availability of lithium-ion battery packs of 10kW or more might just lead to what he called “Electric Utilities 2.0”.

The mass production of large-format Li-ion cells and packs for vehicles could provide, he suggested, for local energy storage—both for homeowners and at power generation facilities. After all, aside from dams—effectively huge energy storage devices—the power that utilities produce has to be consumed within fractions of a second, because there are few cost-effective ways to store it. But battery packs might change that.

Imagine, Kjaer said, a home energy storage and management system with a 1.5kW photovoltaic array added to a 10-kWh battery pack. Right now, 3kW of PVs costs about $27,000. If you cut that in half, but add a $5,000 battery, a home can not only create but store power from the sun, and for that matter, from the power company, for less than $20,000. (For perspective: A 10kW battery pack costs several times $5,000 today, but the price is not unreasonable looking out a few years, after production builds and costs decline.)

With smart meters and demand-variable power pricing, the home could remove itself from the grid whenever power gets too costly—or, in emergencies, at the utility’s request—and possibly even feed power to the grid, known as reverse metering.

At a larger scale, the same principle applies for 1- to 2-MW energy storage substations at wind farms. The challenge to renewable energy like wind, of course, is that the power isn’t always produced when it’s most needed. Wind power, for example, tends to be most prolific after dark—when it’s least needed. Already, two utilities are testing large battery packs racked into experimental storage facilities to see whether they can raise the utilities’ compliance with increasingly stringent mandates for their Renewable Portfolio Standard.

A final wrinkle: Orders from utilities for large-format Li-ion packs might hasten the ramp-up of full-scale manufacturing—which would lower costs for carmakers faster than their own demand alone ever could. With each full-scale lithium-ion cell manufacturing plant costing a few hundred million dollars, capital investment won’t come until the market demand is there. Utilities could help.

With their long amortization horizons—in some cases, decades—could utilities can play a major role in hastening affordable battery packs for hybrids and plug-ins? Watch your utility bill for new offers on new home energy-storage solutions.