Battery Cost

Hi, 

I have read in past forum posts that the cost of most batteries is found on $/kWh basis. However, I am referencing a 2018 study done by  NREL  titled "Identifying Critical Factors in the Cost-effectiveness of Solar and Battery Storage in Commercial Buildings", and they but their cost points in both a $/kWh and $/kW. I am trying to use these figures as a reliable cost point for a commercial system I am trying to analyze, and I am wondering if I should be using just the $/kWh input, just the $/kW, or both. I have also found that  Lazard  publishes numbers on a $/kWh and $/kW and I still have the question whether or not I should be using just one or both of these numbers. 

In addition, are these numbers in the proper range? I am concerned about the discrepancy. 
Mid-Cost Point NREL numbers: 

• $290 / kWh
• $1,062 / kW

Lazard numbers (for Lithium-Ion, standalone pg. 29) 

• $335-580 / kWh DC
• $158-254 / kW AC

Thank you in advance for you help. 

Hi Caroline,

See the discussion at the end of Section 2, "Methods" in Cole (2019) "Cost Projections for Utility-Scale Battery Storage" for some insight into the reasons for expressing battery costs in $/kWh vs $/kW. That is available as a PDF here:

www.nrel.gov/docs/fy19osti/73222.pdf

For SAM's default costs, we mostly use data from the NREL Annual Technology Baseline at atb.nrel.gov/ . The battery costs are at atb.nrel.gov/electricity/2019/index.html?t=st . Note that SAM's default costs are for a complete installed system, so they account for more than just the purchase price of the equipment. (And, as always, SAM's default costs are intended as a reasonable starting point for your analysis rather than as a reference for the current state of the market.)

SAM allows you to enter the battery cost in $/kWh, which scales with the rated storage duration (rated kWh capacity / rated kW maximum discharge rate = rated hours of storage), and $/kW, which scales with the battery's rated maximum discharge rate, so you can use either method for your analysis in SAM.

The market for batteries is rapidly evolving, so the costs in these published reports are likely to vary from each other and to change as new versions are published over the near term.

Best regards,
Paul.

Paul, your comment above notes we can use "either method" in regards to battery cost in $/kWh or $/kW. Is that to say we should only use one figure or the other, as opposed to using both in SAM?

According to 2023 figures from the ATB, Li-ion costs are $1906/kW and $476/kWh ( atb.nrel.gov/electricity/2024/utility-scale_battery_storage ) Would this attached image then represent an appropriate battery cost input, assuming a standard 60 MW, 240 MWh, 4-hour system?


What about for flow battery systems where the power capacity ($/kW) and energy capacity ($/kWh) can be decoupled through the modification of electrolyte tank volume? See slide 13: ( energy.sandia.gov/wp-content/uploads/2021/12/6_Wittman_Reed_SNL_WIPSC_Session5_6-23-21.pdf ).  Slide 10 of that same presentation shows cost figures for Vanadium-Redox flow batteries priced at ~$2400/kW and ~$600/kWh using the same 4-hr standard duration. If the electrolyte qty/duration were increased to 6 or 8 hours, which price method would be preferred - $/kW or $/kWh?

Thanks, Will

Hi Will,

SAM has the flexibility to specify battery costs in $/kWh of energy storage capacity, $/kW of maximum discharge power, or both. The appropriate units for your analysis will depend on what you are trying to accomplish and what data is available.

As for the flow battery costs, any costs that scale with energy capacity or duration (kWh) should be assigned to the $/kWh component, and costs that scale with discharge capacity (kW) should be assigned to the $/kW component.

However you choose to use these inputs, you should double-check the calculated total battery cost along with the project total installed cost to make sure the dollar values are what you expect.

Also, be aware that a separate battery replacement cost is specified on the Operating Costs page, and can only be specified in $/kWhdc of energy storage capacity. There is also a battery operating cost in $/MWhac of discharged electricity for costs associated with operating and maintaining the battery. You can see these costs after running a simulation on the Cash Flow tab of the Results page under "Operating Expenses."

Best regards,
Paul.