Published on October 5th, 2020 |
by Zachary Shahan
October 5th, 2020 by Zachary Shahan
We just pulled down an article about vanadium flow batteries versus lithium-ion batteries for long-duration energy storage because Tesla CEO Elon Musk responded, “This article is wildly incorrect about lithium battery costs by a factor of 5 or more presently & 10X long-term.” However, that raised more questions than answers for me, so I have dug in further and have some new information to share along with a lot more context regarding battery prices and long-term costs.
I’ve gotten some extra details from Elon regarding Tesla energy storage pricing, including information that I don’t think was previously public, and I’ve reached out to StorEn Technologies for more details on their assumptions.
First of all, though, there are at least a few things to point out here to clear up some massive confusion and misunderstanding. To start with, the biggest thing is:
The $/kWh cost of electric vehicle batteries is not at all the same as the $/kWh cost of stationary battery storage systems.
Additionally, there are actually two different types of $/kWh — there’s the price of the storage system based on one-time energy storage capacity and upfront cost (for example, if your battery has 100 kWh of energy storage capacity and costs $5,000, the figure is $50/kW), and there’s actual cost per kWh of electricity stored over the lifetime of a storage system. To figure out the latter, you need to calculate number of cycles and lifetime of the system (and, actually, even more than that, like efficiency, maintenance, and repair). I did this for the Tesla Powerwall versus other top options in 2015 when the Powerwall came out — check that out if you want to dive more deeply into what such calculations entail.
The pricing estimate in the article earlier today that Elon was responding to was as follows: “lithium batteries typically cost $600 to $900/kWh and last for 3,000 to 4,000 cycles. Therefore, their cost per cycle averages $0.21.”
Anyone who follows the electric vehicle market, especially EV battery prices, could surely look at the first set of figures ($600–900/kWh) and have their eyes bulging out of their head. However, this is not pricing for Li-ion batteries for EVs. This is pricing for stationary storage, which is much different. Also, I am quite confident this was “all-in” pricing — pricing for a full stationary storage system, not just the battery cells or packs alone.
With all of that in mind, let’s dig in a little further.
Tesla Powerpack & Megapack Pricing
One commenter pointed out that Tesla Powerpack pricing is now at $539/kWh. That is after a very recent price cut and is still close to $600/kWh. It is certainly not a 5× difference, but it’s well below the $750/kWh average that was used to come up with the $0.21 per-cycle estimate. Yes, that $539/kWh price includes inverter costs, but I believe that StorEn was indeed focused on whole-system costs as well, especially since vanadium flow batteries benefit more from that viewpoint — which is related to a big benefit I’ll come back to in a moment, very long life.
In response to my questions about the cost of a Tesla Powerpack, Elon Musk provided some interesting new information:
“Powerpack is an older product. Megapack is what we now ship to utility or heavy industrial users.
“The battery pack portion of it is less than $200/kWh. Power electronics and servicing over 15 to 20 years take the price up to roughly $300/kWh. However, it would not be accurate to compare a vanadium flow battery cost alone to the cost of lithium battery plus power electronics and 15 to 20 years servicing.”
Again, as I read it, StorEn was referring to all-in, whole-system costs. I’ve reached out for clarification and will update this article to indicate whether that is correct or not if I get a response on this matter.
Also, again, you should really consider full lifetime cost per kWh stored. As you can see above, Elon noted 15–20 years of servicing. StorEn mentions a 25 year lifespan on a 500 kWh system with up to 15,000 cycles. What does that mean in terms of long-term cost per kWh stored? Well, we don’t have that information since I don’t see a price for the ST 50-500 system. However, maybe we do have it with a little math. In the other article, StorEn noted vanadium flow batteries could have a cost of $0.04/kWh per cycle, and could reach 15,000 cycles. That comes to $600/kWh. (Interestingly, that happens to be the bottom end of StorEn’s estimate for Li-ion batteries.)
If I can get more pricing details from StorEn, I will update this article to add it in or I will write a new one. I could also then try to calculate a lifetime price-per-kWh range for the Tesla Megapack.
Tesla Powerwall Specs & Pricing
StorEn offers a residential/small-scale energy storage product as well as the utility-scale energy storage system mentioned above. So, let’s also consider the Tesla Powerwall, a home energy storage battery one of our writers has. (Well, he has two of them.)
One 13.5 kWh Tesla Powerwall cost our writer, Kyle Field, $6,500 — not including the Tesla Gateway or installation costs. That means a cost of $481.48/kWh. Pricing has apparently gone up a bit recently, though, and is now $7,000, not including the Gateway and installation (which costs $4,500, or $3,500 if included with a Tesla solar rooftop system). With a price of $7,000, that’s $518.52/kWh. Again, that is well below a low-end assumption of $600/kWh (not to mention $750/kWh or a high-end assumption of $900/kWh), but it is not one-fifth the cost. I’m not sure whether it makes sense to throw in the cost of the Gateway or not, especially since it’s not clear at all what I should be comparing these products and figures to.
I do not see pricing for the StorEn VFB battery, but have also asked the company to provide that.
There are other notable specs and promises to consider as well. The StorEn battery is rated for 25 years, while Tesla’s Powerwall has a 10 year warranty.
StorEn reports a 15,000 cycle life. The Tesla Powerwall 1 offered a ~5,000 cycle life. The Powerwall 2 comes with “unlimited cycles” for solar self-consumption/backup or “37.8 MWh of aggregate throughput” for other applications. Calculations of the former come to a max of about 3,100 cycles over 10 years, while calculations of the latter come to 3,200 cycles if you assume 37.8 MWh refers to both charging and discharging.
As one final set of specs to consider, Tesla’s Powerwall has a 90% round-trip efficiency, whereas the StorEn system has a 75–80% round-trip efficiency.
Determining actual cost per kWh of electricity stored over the lifetime of the product is nearly at our fingertips. If I get a few more details, I’ll update this section or even publish a whole new article.
There are still some information gaps here that would help provide a more thorough comparison of these energy storage systems, but here are some core conclusions:
The Tesla Megapack now comes at a cost of <$200/kWh, or ~$300/kWh with power electronics and servicing included, per Elon Musk’s comments to me today. That’s well below what recently seemed to be a new low price of $539/kWh for the Tesla Powerpack. A Tesla Powerwall now costs $518.52/kWh, up from $481.48/kWh earlier this year, but that does not include the cost of the Tesla Gateway or installation.
None of that tells us the cost of electricity stored over the life of the system. To determine that, you have to add in several other factors, some of which are tough assumptions to make over the course of a decade or two. They include efficiency, depth of discharge, number of cycles, and maintenance and repair costs.
Hopefully this clarifies — to some extent — the mild controversy from earlier today. If enough extra information is gathered on these topics, I will follow up with another piece.
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About the Author
Zachary Shahan is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao.
Zach has long-term investments in NIO (NIO), Tesla (TSLA), and Xpeng (XPEV). But he does not offer (explicitly or implicitly) investment advice of any sort.