Cost Analysis & LCOS
Understanding the true cost of energy storage through Levelized Cost of Storage analysis
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Section 2 of 5Levelized Cost of Storage (LCOS)
LCOS is the standard metric for comparing energy storage costs, similar to LCOE for generation technologies. It represents the total lifetime cost of storage divided by the total energy discharged over the system's lifetime. Understanding LCOS helps compare different storage technologies and identify cost reduction opportunities.
Key factors affecting LCOS include capital costs, round-trip efficiency, system lifetime, cycling frequency, degradation rates, and financing costs. As storage technologies mature, the relative importance of these factors shifts, requiring different optimization strategies for different technologies.
Why LCOS Matters
LCOS enables apples-to-apples comparison of storage technologies and reveals the true economic value of different performance characteristics. It guides technology development and market adoption decisions.
Interactive LCOS Calculator
Levelized Cost of Storage (LCOS)
Cost per unit of energy discharged over system lifetime
Cost Sensitivity Analysis
💡 Key Insight
LCOS analysis reveals that capital cost has the largest impact on total storage economics, but efficiency, lifetime, and cycling frequency become increasingly important as capital costs decline. Higher utilization through more cycles per year significantly improves economics by spreading fixed costs over more energy discharged.