Old electric car batteries will have a big future. Here’s why by Katie Fehrenbacher @FortuneMagazine June 15, 2015, 10:11 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Finding a way to reuse old electric car batteries has been a longtime goal for the auto and clean energy industries. Now, after years of research, potential solutions are starting to gain momentum. On Monday, Nissan plans to announce that it has teamed up with startup Green Charge Networks to reuse batteries from Nissan’s LEAF electric car to store energy for commercial and industrial buildings. The partnership is an important milestone because Nissan’s LEAF is among the best selling electric cars with over 70,000 sold in the U.S. Reusing old car batteries isn’t as easy as it may sound. Batteries gradually lose their charge over time. At a certain point, they become too weak to power a car. But they still retain enough charge for lighter chores. Until recently, the supply of old car batteries has been too small to be of much use. The vast majority of electric cars hit the road within the past five years and therefore didn’t require new batteries. But the older among them are starting to hit middle age, at least in terms of electric cars. As such, a growing number of drivers are reaching the point when they need to replace their batteries — creating a ready supply of second hand batteries that can be reused for jobs like commercial energy storage. Some of the first Nissan LEAFs, for example, are now four and five years old. Nissan offers an eight-year, 100,000 mile warranty on the LEAF battery pack. Green Charge Network’s battery system installed in a building, courtesy of Green Charge Networks. Nissan isn’t the only big automaker with a plan to reuse old batteries. GM plans to announce a separate initiative Tuesday at the Advanced Automotive Battery Conference related to its electric car, the Chevy Volt. GM has been working on this issue over the years with power giant ABB and Duke Energy. Green Charge Networks is among a handful of startups that are using low cost batteries to help corporate customers manage their energy use. When electricity rates are high, like during a hot summer afternoon, it automatically shifts customer energy use from the traditional power grid to batteries. The goal is to help clients lower their electricity bills. UPS, 7-Eleven, and Walgreens are among the companies that have signed on. In many cases, battery management companies like Green Charge Networks install batteries for free for customers. To make money, they take a cut of the savings over time. By repurposing used LEAF batteries instead of buying new ones, Green Charge Networks can reduce its costs. This isn’t Nissan’s first try at reusing LEAF batteries. Shortly after putting LEAFs on the market, Nissan created a joint venture with Sumitomo, called 4R Energy, to research how to give batteries a second life. In 2010, CEO Carlos Ghosn predicted Nissan would be selling 500,000 Leafs worldwide by 2014. He has a lot of ground to make up.Photo: YOSHIKAZU TSUNO/AFP/Getty Images But the deal with Green Charge Networks goes further by using repurposed LEAF batteries commercially. Green Charge Networks CEO Vic Shao told Fortune that the company will start installing reused LEAF batteries with customers by the fourth quarter. In prelude, the company plans to equip one of Nissan’s California facilities with used batteries. Green Charge Networks wouldn’t comment in detail about the difference in cost between using second-hand LEAF batteries and new ones. But Shao called the economics “significantly more attractive” than using new batteries. Freewire, a startup that uses repurposed batteries to build mobile charging units, has said that the recycled batteries it buys from companies like Nissan can be one sixth of the price of a new battery. If charged and discharged twice a day, their recycled batteries can last another five years, the company said. If such numbers are accurate, then second life batteries could be a truly underappreciated asset for the growing energy storage market. As this market matures, it could also benefit companies like Tesla that will both make batteries, manufacture cars and produce battery packs to be used by utilities. At the end of the day, squeezing as much life as possible out of batteries just makes sense both economically and environmentally. More often, electric car batteries will likely be recycled, or worse, thrown out. Updated to correct that GM has been researching the second life of electric car batteries with ABB and Duke Energy, not Duke University.