U.S. Solar Photovoltaic System and Energy Storage Cost Benchmark (Q1 2020)

Cost Projections for Utility-Scale Battery Storage: 2021 Update

“…The resulting total system cost for a 4-hour device is shown in Figure 2. The 2020 starting point of $345/kWh is taken from Feldman et al (2021). Although there is uncertainty in the 2020 cost (which is discussed later), we use a single cost for 2020 for convenience as we apply these costs in our long-term planning models (applying the same costs in 2020 means that the 2020 solution will not change as we shift from a "high" to a "mid" to a "low" cost projection for storage).…”

“…A higher or lower starting point would shift the set of projections up or down relative to the change in magnitude of the starting point. To better assess the quality of our starting point, we compared the value from Feldman et al (2021) with other values published in 2019 or later (shown in Figure 4). We did not consider older reported values because of the rapid changes in battery costs.…”

“…We report our price projections as a total system overnight capital cost expressed in units of $/kWh. However, not all components of the battery system cost scale directly with the energy capacity (i.e., kWh) of the system (Feldman et al 2021). For example, the inverter costs scale according to the power capacity (i.e., kW) of the system, and some cost components such as the developer costs can scale with both power and energy.…”

“…To separate the total cost into energy and power components, we used the bottom-up cost model from Feldman et al (2021) to estimate current costs for battery storage with storage durations of 2, 4, 6, 8, and 10 hours. By fitting the total cost for the five distinct durations as a function of duration to a linear curve, we calculated the energy and power cost components for current battery storage systems.…”

“…We applied the cost reductions for future years to the battery pack price in the bottom-up cost model from Feldman et al (2021). We adjusted the cost of other (non-energy) items in the model such that the cost of the 4-hour battery system matched the cost from the for the 4-hour battery system cost projections from literature described above.…”