How to reduce the Lithium-ion battery cost for solar or off-grid energy storage
Most people believe the cost of Lithium-ion batteries will go down if the scale of the solar energy storage demand scales up.
In reality, the cost of the Lithium-ion battery did go down for the past few years. However, it may go up if the demand scales up due to the supply and demand for precious raw materials.
There are 3 factors affecting the effective cost of the Lithium-ion battery system
1/ Power
It is so easy to mix up two parameters. Power is in KW (Kilo-watt) while Capacity is in MWh (Megawatt hour).
Power requirement, the sum of all equipment’ power rating in a facility, is the first parameter to be determined.
2/ Capacity
Capacity, with a factor of time, determines how long the energy storage system will last to support the power requirement of the facility.
For example, a premise of equipment with total 10MW can be supported by an energy storage system with 10MWh capacity for 1 hour.
3/ Battery life
The cycle life specification of a typical Lithium-ion battery is 2,000 cycles at 80% D.O.D. Assumed one cycle per day, Lithium-ion battery of 2,000 cycle life can survive for 5.5 years without degrading.
Some Lithium-ion battery has a high cycle life of 5,000 cycles at 80% D.O.D.
Most of the design of the solar energy storage system is based on 90-100% D.O.D in order to minimize the initial price tag.
In general, according to the data from one of a leading manufacturer of Lithium-ion batteries. Depth of discharge (D.O.D) affects the cycle life. Detail calculator
| D.O.D | Cycle Life | Cycle Life |
| Improvement | ||
| 90% | 3000 | 0% |
| 80% | 5000 | 67% |
| 70% | 7000 | 133% |
If the design of the Lithium-ion battery system is based on 70% D.O.D instead of 90%, the cycle life will be improved by 133%.
With a 20% increase in battery capacity/cost, the effective cost of the Lithium-ion battery system can be reduced by more than 50%.
Conclusion
The effective cost of a Lithium-ion battery system is the actual money the user is paying.
In addition, long service life will save labor costs to replace the battery system.
The author has over 30 years of experience in the Lithium-ion battery industry from the laptop application, electric vehicle, to large energy storage.
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