Guide to Solar Batteries: Are They Worth It? (November ...

Author: Dorinda

Nov. 28, 2023

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Tags: Energy

All solar batteries have the same basic function, but each type is suited for different applications. Your solar battery will offer higher reliability and return on investment when its chemistry is suitable for the application at hand.

For example, some electricity consumers are subject to higher kWh prices at certain times of the day, or additional charges for sudden peaks in consumption. In this case, you need a battery bank capable of delivering large amounts of electricity in a short time. Lithium-ion batteries are suitable for this task, but not redox flow batteries.

Regardless of the battery type, you also need to consider the depth of discharge (DoD), which indicates a battery’s usable capacity. The service life of a battery can be drastically shortened if you exceed the DoD, or you can even cause permanent damage. For example, using 70% of the stored energy is acceptable with a solar battery rated for 80% DoD, but not a 50% DoD battery.

Lead-Acid

Lead-acid batteries are an established technology, commonly used by off-grid solar energy systems in remote locations. Lead-acid batteries are affordable and have a well-established supply chain due to their popularity, so you can easily find vendors and technical support.

In spite of their low cost, lead-acid batteries have some technical limitations you should consider:

  • Lead-acid batteries typically have a charging life of 500 to 1000 cycles.
  • Batteries should be fully recharged after each use, or the lifespan is drastically reduced.

An absorbed glass mat or AGM battery is an improved version of the traditional lead-acid battery. They can charge faster while having a spill-proof design and more durability. You can also find AGM deep cycle batteries that are designed for 80% DoD.

Using lead-acid batteries along with solar panels requires charge controllers to sustain a suitable charging current. These batteries should not be wired directly to your solar array, or your system may be damaged by excessive current.

Lithium-Ion

Lithium-ion batteries have become very popular in recent years since they can achieve synergy with solar panels and wind turbines. For example, the Tesla Powerwall and Enphase IQ are two types of lithium-ion batteries commonly used in home solar applications. You can also find smaller lithium batteries from brands like Renogy and WindyNation, which are portable and better suited for DIY solar projects.

Lithium iron phosphate or LFP batteries are a subtype of lithium batteries, characterized by a superior service life. The best LFP batteries offer a service life of over 4,000 cycles at 80% DoD, which means they can last for over 10 years on a daily charging cycle. This makes LFP batteries the ideal complement to solar installations. Unlike lead-acid batteries, which need separate charge controllers, many of the lithium battery models that are commercially available come with built-in chargers and controls.

The main drawback of lithium-ion batteries is the high price, but this could change in the near future — the U.S. Department of Energy is targeting a 90% energy storage cost reduction by 2030. Lithium batteries can also suffer a phenomenon called thermal runaway when used at high temperatures, which causes them to catch fire. You can prevent thermal runaway by making sure your batteries are high-quality and installed by qualified electricians.

Nickel-Cadmium

Nickel-cadmium batteries are characterized by their durability, tolerance to high temperatures and simple maintenance needs. Thanks to these performance features, nickel-cadmium batteries are popular in industrial and utility applications. Unfortunately, cadmium is highly toxic to humans, so nickel-cadmium batteries are not recommended in homes.

Flow

Flow batteries store energy by separating positive and negative electrical charges in chemical solutions, which are stored in separate tanks. When these two solutions interact, they undergo a reduction-oxidation reaction (redox) and the battery releases energy. This battery technology is also referred to as “redox flow” for this reason.

The main disadvantage of redox flow batteries is their space requirement, and they are not cost-effective for small-scale projects. Even a small redox flow battery system can be the size of a shipping container, so using flow batteries in home solar systems is not viable.

 

 

/ CAPEX is the costs you will incur to buy, install and commission the battery safely. While CAPEX of newer technologies may be relatively high, it generally decreases over time as install base grows, supply chains expand and economies of scale are realized. CAPEX should also include permitting costs, civil works, and other installation costs beyond the DC batteries themselves.

/ O&M costs have both fixed and variable components. Fixed costs, for example, may include scheduled annual or bi-annual routine maintenance. Variable costs will typically vary with hours of operation or cycle count. And data costs are often overlooked: some lithium-ion manufacturers’ product warranties require operators to collect and maintain detailed operating data.

/ Augmentation or replacement costs represent a large chunk of lithium ion battery project costs today, but they are notably absent from non-degrading technologies such as vanadium flow batteries. With every cycle, a lithium-ion battery’s ability to hold charge degrades; to maintain battery capacity cells need to be replaced or added – a process called augmentation. This includes the cost of the new cells, the cost to swap them out, and the cost of any additional space.

/ End-of-life (EOL) costs may include include disassembly, transportation to a battery recycling facility and fees to safely dispose of lithium-ion cells. Some batteries have residual value when they reach the end of their useful life: vanadium electrolyte can be reused in a new battery, and NMC lithium ion batteries contain valuable metals that can be recovered and sold. Other chemistries like LFP have little residual value to offset EOL costs.

/ Efficiency Costs represent the cost of energy lost to round-trip efficiency (RTE). All batteries have an RTE less than 100%, but the figure varies across the range of available technologies available. This can dictate a battery’s ideal uses; for example, a vanadium flow battery requires a higher profit per cycle compared to lithium because of its lower RTE, but has better cycling capabilities making it ideal for high throughput regulation services.

We use LCOS in our model below, but if you prefer an LCOE model you would combine both charge and efficiency costs, yielding the total cost of energy delivered. As a reminder, charge costs are what it costs to get useful energy into your battery; if you’re charging the battery from the grid then wholesale prices are the other major driver of charge costs.

 

Battery Storage Cost Comparison: Vanadium Flow vs Lithium-Ion

Let’s look at an example of the LCOS cost breakdown for two different battery technologies performing the same duty cycle: a vanadium flow battery and a lithium-ion system. This is just one example, and different applications mean different inputs, but it demonstrates how relative costs can be quite different across technologies.

We’ll cover the formulas in a future article, but if you’d like to read more on how to calculate levelized cost of storage we’d recommend looking at the World Energy Council’s report on shifting from cost to value in wind and solar applications, the U.S. Department of Energy’s Energy Storage Grand Challenge Roadmap, the 2018 PV + storage cost analysis from NREL, or the University of Oxford study on the LCOE of PV & grid scale energy.

In this example we have modeled a grid-connected utility-owned battery co-located with a solar array, performing multiple daily cycles to serve deep wholesale and balancing markets. Such markets reward high-throughput systems: the more opportunity the battery has to do valuable work like solar shifting or performing energy arbitrage the more revenue it can earn.

Your scenario may be quite different, for example you may use a higher discount rate depending on your company’s cost of capital, or you might have a shorter project lifetime horizon; most utilities we speak to are using 25-40 year models today.

In this scenario, we assume a 10 MW / 40 MWh battery with a high throughput equivalent to 700 full depth of discharge cycles per year; that’s a little under 2 cycles per day with an availability of 96%. We’ve modeled a 6% discount rate over a 40 year project life.

The LCOS for the two systems are quite different ($111/kWh for the VFB vs $131/kWh for the Li-ion), and the composition of that cost varies as shown in figure 3.

Figure 3. Battery Storage Cost Comparison

Guide to Solar Batteries: Are They Worth It? (November ...

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