The Capital Expenditure (CAPEX) of Battery Energy Storage Systems (BESS) can vary depending on different factors such as the size of the system, the battery chemistry used, and storage duration. Below are typical costs and facts regarding CAPEX for BESS.
Typical Cost and Facts on CAPEX for BESS
Average CAPEX for Utility-Scale BESS (2024)
- Lithium Iron Phosphate (LFP) Systems: Around $148 per kilowatt-hour (kWh).
- Vanadium Flow Batteries (VFB): Around $83 per kWh, or $83,000 per megawatt-hour (MWh).
Projecting Cost Trends
- 2024 Forecast: The price of a typical 20-foot DC containerized BESS in the United States is likely to fall to approximately $148 per kWh from around $180 per kWh last year.
- 2030 Forecast: Total installed costs of battery storage systems decline by 50% to 60% due to learning in production, efficiency in material usage, and economies of scale.
Sample Cost Estimate
For a 10 MWh BESS:
- Lithium LFP System: Approximately $530,000.
- Vanadium Flow Battery: Approximately $830,000.
Estimates are based on the average per-kWh cost outlined earlier.
Factors driving CAPEX
- Battery Chemistry: LFP batteries are generally cheaper than other chemistries.
- System Duration: Longer discharge times (e.g., 4 to 10 hours) typically raise system costs because of the requirement for larger storage capacity.
- Economies of Scale: Larger systems tend to enjoy lower costs per kWh.
- Geographic Location: Costs can also differ based on local labor, infrastructure, and regulatory climate.
Market Outlook
The market for BESS is growing rapidly, with large-scale deployments underway in states like California and Texas. As mass production gets under way and technology continues to improve, prices will remain in decline, further placing energy storage within reach and more economically viable for residential and commercial applications.
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