Toyota has announced the development of a new vehicle-to-grid-like setup capable of sharing power between plug-in vehicles like the Prius Plug-in or RAV4 EV, and a home. The vehicle-to-home system (or V2H as the carmaker is calling it,) can cycle energy from an EV or PHEV into the home during periods of outage or to balance out the power load during peak hours of energy usage. The system will begin testing in ten Japanese households by the end of the year.

Toyota says the technology is being developed as part of the “ToyotaCity Low-Carbon Verification Project” it started two years ago, partnering the carmaker with 19 other companies in an effort to help households and cities optimize their energy management, with the overall goal of reduced CO2 emissions. Vehicle-to-home and other energy-balancing systems require a means to build up and store energy during times of lower usage so that it can be used later, when there is more demand and utilities tend to charge more for power. Plug-in vehicle batteries have long been identified as potential sites for this kind of energy storage, and in recent years a wide array of carmakers and charging station manufacturers have announced plans to develop such systems.

In addition to helping utilities avoid strain on the grid (and the environment,) V2H benefits electric vehicle owners in several ways. Most attractively, it helps to lower overall utility costs by diverting peak usage to off-peak hours, when electricity is cheaper. Those savings can help to offset the added cost of an electric vehicle battery pack by providing multiple uses for the pack. During emergency situations or when power is scarce or unavailable, V2H can also allow a plug-in owner to power his or her home for anywhere from a few hours to a few days depending upon the kind of vehicle.

Plug-in hybrids like the Prius Plug-in are particularly useful in this situation, because their engines can act as generators, converting gasoline to much-needed electricity. According to Toyota, a fully charged Prius Plug-in with a full tank of gas can power the average Japanese home for up to 4 days.