COMPARISON OF RECENT BATTERY SYSTEM TURNKEY CAPITAL COSTS

The turnkey capital cost of battery systems has been decreasing the past few years. The below table has turnkey capital costs/kWh of some 2016 and 2017 projects. Subsidies, such as cash grants, discounts, investment tax credit, ITC, and 5-year accelerated depreciation, which serve to reduce the cost/kWh, were ignored.

The cost/kWh would increase due to the cost of financing and amortizing; return on investment; O&M and disposal, and because the:

- Solar panels degrade over time, i.e., less kWh production/y

- Inverters often operate at part load, which is less efficient, i.e., increased losses

- Batteries degrade over time due to cycling, i.e., increased losses.

1) Green Mountain Power, a utility in Vermont with 77% of the electricity market, owns the Stafford Hill, 2.5 MW solar plant, 7722 panels, on about 20 acres. 

GMP added 2 MW (storage 2.4 MWh) of advanced lead acid batteries, 2 MW (storage 1 MWh), of lithium-ion batteries, total storage of 3.4 MWh, and (4) 500-kW inverters. This means 2 MW can be delivered for 1.7 hours, or 1 MW for 3.4 hours. 

The expected life of the batteries is about 10 - 15 years. The turnkey cost was about 7.155, solar system + 5.345, battery system = $12.5 million. 

Battery system turnkey capital cost = $5,345,000/3400 kWh = $1,572/kWh (2.27 times the $692/kWh cost of the Sterling, MA, battery system which performs similar functions as the GMP system). See below.

2) In Sterling, Massachusetts, NEC ES is providing a turnkey GSS® energy storage system which includes a single 53' container housing 3.9 MWh of lithium ion batteries, a 2 MW power conversion system, and proprietary NEC ES AEROS® controls software suite. NEC ES will provide service and maintenance. 

http://www.windtaskforce.org/profiles/blogs/solar-energy-does-not-r...

Battery system turnkey capital cost = $2.7 million, or $692/kWh.

3) Tesla markets a wall-hung, nominal 14 kWh, available 13.5 kWh, Powerwall 2.0 battery unit, with lithium-ion cells made by Panasonic, either in Japan or Nevada. The unit is designed for daily charging and discharging.

Battery system turnkey capital cost = $6,200, factory FOB + S & H + Contractor markup of about 10 percent + Misc. hardware + Installation by 2 electricians, say 16 hours @ $60/h = $8,200, or $586/kWh. 

This is a Tesla estimate, which likely would be higher, depending on customer site conditions. The Tesla estimate does not include electrical system upgrades (if necessary), taxes, fees, and grid interface. Here is a schematic drawing of the miscellaneous equipment required for a turnkey system.

http://cdnassets.hw.net/d5/fc/a3926e9a4ec8a8026e9dd8bb3485/0616-jlc...

Tesla offers a 10-y warrantee for manufacturing defects, but does NOT cover performance. Tesla estimates a10% degradation in performance by year 10.

The unit likely contains enough batteries to store about 20 kWh, so by marketing a unit with an available 13.5 kWh, it likely never gets charged above 95% (charging to 100% is harmful) or discharged below 25% (discharging below 25% is harmful), thereby achieving the warranty 10-year life, 3600 cycles, likely with less than 10% degradation.

http://www.batteryuniversity.com/learn/article/how_to_prolong_lithi...

4) A Very Large Battery System in Australia: The Tesla Powerpack system in Australia, the largest in the world, has a rated capacity of 100 MW/129 MWh delivered as AC. The system:

1) Smoothens the variable output of a nearby 315 MW French-owned wind turbine system,

2) Prevents load-shedding blackouts and

3) Provides stability to the grid, during times other generators are started in the event of sudden drops in wind or other network issues.

Here is an aerial photo of the system on a 10-acre site. The installed cost of the Australian Powerpack system was about $66 million, or 66 million/129,000 = $512/kWh; this is a low price, because Tesla was eager to obtain the contract.

NOTE: The battery does not serve to store electricity for delivery at a later hour on the same day, or a week later, or several months later. For those purposes, much larger batteries would be required.