Comparison of batteries by cost per kWh accumulated over the lifecycle

Energy storage, especially with batteries, is becoming a fundamental pillar for a more sustainable and independent energy future. Whether it's storing energy produced by solar panels or taking advantage of hourly electricity rates, batteries give us greater control over our energy.

But what is the “real cost” of this stored energy? It's not enough to just look at the purchase price of the battery. We need to consider how much energy it will provide us over its entire operational life. This is where the Levelized Cost of Storage (LCOS) comes into play.

What is LCOS (Levelized Cost of Storage)?

Imagine LCOS as the average cost for each single kilowatt-hour (kWh) of energy that the battery is able to deliver throughout its existence. It's a bit like calculating the cost per liter of fuel that a car will consume over its entire life, taking into account not only the initial price of the car but also how much gasoline it will need.

LCOS allows us to compare different storage solutions on a fair basis and truly understand the long-term investment.

The Data We Have for Your Battery

For our calculation, we have the following crucial information about your specific battery:

1. Purchase Cost:
2. Nominal Capacity: 10 kWh (This is the amount of energy the battery can store when new and fully charged)
3. Declared Life Cycles: 8000 cycles (A “cycle” occurs every time the battery is fully charged and then fully discharged. Partial use counts as a fraction of a cycle).
4. Residual Capacity at End of Life: 80% (This means that, after 8000 cycles, the battery will still be able to store and deliver about 80% of its initial 10 kWh capacity. This point is often considered the “end of life” for many applications, even though the battery could continue to operate with reduced performance).

Scientific and Technical Concepts Explained Simply

Before calculating, let's better understand the terms:

• Kilowatt-hour (kWh): This is the unit of measurement for electrical energy. Think of the kWh as the “fuel” for electrical devices. A 100 Watt light bulb left on for 10 hours consumes 1 kWh. The 10 kWh capacity of your battery means that, when new, it can power, for example, a 1kW oven for 10 hours (or a 1 kW device for 10 hours).
• Charge/Discharge Cycle: A lithium battery does not last forever. Every time it is used (charged and discharged), it undergoes slight degradation. A complete cycle is equivalent to fully discharging the battery and then fully recharging it. The lifespan of a battery is often expressed in the number of complete cycles it can withstand before its performance drops significantly.
• Battery Degradation (Fading): Use (cycles) and time lead to a gradual reduction in the battery's maximum capacity. The 10 kWh battery, after some cycles, may only hold 9 kWh, then 8 kWh, and so on, down to 60% of the initial capacity as specified. This is normal and expected.
• Total Energy Throughput: This is the fundamental data for LCOS. It's not simply the nominal capacity multiplied by the cycles (10 kWh * 8000 cycles = 80,000 kWh). This is because the capacity decreases over time. We need to consider the energy delivered in each cycle, knowing that the energy per cycle decreases as the capacity decreases.

Simplified Calculation of Total Deliverable Energy

Recommended parameters for the economic comparison of different technologies or manufacturers: Product A Product B

Usable storage capacity (kWh)

Complete cycles (quantity)

Lifespan in years (assumption: 250 complete cycles per year)

System efficiency (%)

Investment costs (CHF)

Storage costs, without interest (CHF/kWh of electricity drawn from the battery)

To have a simple but reasonable calculation of the total deliverable energy, we can average the usable capacity over the battery's lifetime. The battery starts with 10 kWh and ends with 6 kWh (60% of 10 kWh).

• Initial Capacity: 10 kWh
• End of Life Capacity: 10 kWh * 80% = 8 kWh
• Estimated Average Capacity over lifetime: (10 kWh + 8 kWh) / 2 = 9 kWh

Now, we can estimate the total energy the battery will deliver over its 8000 cycles using this average capacity:

• Total Deliverable Energy ≈ Average Capacity * Number of Cycles
• Total Deliverable Energy ≈ 9 kWh/cycle * 8000 cycles = 72,000 kWh

This estimate (72,000 kWh) represents the total amount of “fuel” you can get from this battery over its useful life, taking degradation into account.

The LCOS Calculation

Now that we have the total deliverable energy and the initial cost, we can calculate the basic LCOS:

LCOS=Total Deliverable EnergyTotal Cost​

In our simplest case, we only consider the purchase cost as the “Total Cost”:

LCOS=4000Fr./72,000 kWh

LCOS≈Fr. 0.055 per kWh

So, based only on the initial cost and the estimated useful life, each kilowatt-hour of energy you use from this battery “costs” you about 5.55 Swiss centimes.

What Is Missing for a More Complete Calculation? (Additional Factors)

The calculation we made is an excellent base, but a truly complete LCOS should consider other factors that affect the actual cost:

1. Operating and Maintenance Costs (O&M): There are costs for monitoring, software, any minor technical interventions, cleaning (if necessary). These, even if often low for residential batteries, should be added to the total cost.
2. Round Trip Efficiency (RTE): No storage system is 100% efficient. During charging and discharging, some energy is lost (dissipated as heat). Typical RTE for lithium batteries is between 85% and 98%. If the RTE is 90%, it means that to draw 1 kWh from the battery, you need to have put in about 1.11 kWh. This reduces the actually usable energy compared to what is put in, effectively increasing the cost per kWh delivered. For a more precise calculation, the deliverable energy (64,000 kWh) should be multiplied by the RTE (e.g. 64,000 * 0.90).
3. End-of-Life Costs or Value: What happens to the battery when it reaches 60% capacity? Are there disposal or recycling costs? Is there a residual value (perhaps for less demanding use, the so-called “second life”)? These factors also affect the final total cost.
4. Discount Rate: In a complete financial analysis, the value of money over time would be considered. A euro spent today is worth more than a euro spent in 10 years. This factor, typical of financial analyses, would make the calculation more complex but more accurate from an economic point of view.

Conclusion

The calculation of the Levelized Cost of Storage (LCOS) is a powerful tool for evaluating the economic effectiveness of a battery system. Using the data provided (purchase cost, capacity, life cycles, and end-of-life capacity), we estimated a basic LCOS of about Fr 0.0555 per kWh for your battery.

This value gives you a clear idea of the intrinsic cost of the energy you will store and use from your battery over its useful life. Remember that this is an estimated value and that factors such as efficiency, operating costs, and end-of-life management will affect the final LCOS in a more in-depth analysis.

Understanding LCOS puts you in a position to make informed choices about energy storage, maximizing the value of your investment in the long term.

https://www.swissolar.ch/01_wissen/fachwissen/photovoltaik/merkblaetter/21013i_scheda_fv_accumulatori.pdf