Plug-in hybrid electric vehicles (PHEVs) have the potential to curb climate change, reduce the cost of transportation, and liberate us from foreign oil. But the expected jump in PHEV sales over the next few years could also have a few troublesome downsides, in the form of more coal-fired air pollution and strains on utility grids.

Although plug-in cars have lower tailpipe emissions than gas-powered cars, the trade-off is that about 49 percent of U.S. electricity is generated using coal, so in some regions a plug-in running on its batteries is nearly the equivalent of a coal-burning vehicle, according to new reports. If large numbers of plug-in hybrids are being recharged with power from the least sophisticated coal plants, "There is a possibility for significant increases of soot and mercury," says a report by environmental advocacy group Natural Resources Defense Council. Soot particles can make it hard to breathe, especially for asthmatics, and mercury is toxic. Plug-in hybrids can certainly make sense in areas that don’t rely on coal-powered energy plants, but in areas that do, it could be a bad equation for the environment.

Another study found that plug-ins also could result in more sulfur dioxide (SO₂) emissions, which contributes to acid rain. The Minnesota Pollution Control Agency found that use of PHEVs would lower most emissions compared with other vehicles, but that resulting SO₂ emissions would be more than double those from gasoline vehicles and about three or four times greater than from driving a regular hybrid. The study also notes that PHEVs would emit more carbon dioxide (CO₂) than driving a conventional hybrid.

Of course, emissions aren’t the only concern with PHEV cars. As a new generation of plug-in hybrids starts arriving in dealerships over the next few years, some people worry that electric grids could become overwhelmed by increasing power demands.

There are some truly innovative and cool new PHEVs that will be hitting the streets in the very near future. Ford and GM recently unveiled plug-in hybrid concept cars, joining with Nissan, Toyota, Honda and others that have publicly stated interest in manufacturing plug-ins. The mayors of more than 50 cities and 150 utilities have joined the Plug-in Partners consortium, and municipalities in 41 states have promised to purchase plug-in hybrids as soon as they are available.

As the biofuel market has recently learned, it’s difficult to make a case for “clean energy” sources, after you factor in all the variables that go into energy production and emissions. Hopefully, by the time new hybrids hit the market, the environmental scales will tip in their favor, but this is certainly an issue to keep an eye on as PHEV technology develops.