Something For The Granddaughters: Projected Cost Of Solar-Plus-Battery Generated Electricity -- January 11, 2015

Cost of electricity:

• most of the US about 10 cents/kWh
• Hawaii: 36 cents/kWh
• with solar-plus-batteries: 535 cents/kWh

From Forbes:

“To support grid defection, we believe the size of the battery needs to be very large, something akin to two-months’ worth of consumption,” Moody’s concluded. “The cost of electricity using that much storage would cost around 552¢ per kilowatt hour (kWh) on a levelized cost of energy basis.”

More specifically, the batteries would contribute about 535¢ per kWh to the total costs and the solar PV system would contribute the remaining 17¢ per kWh. To put this in perspective, the average retail rate of electricity for residential customers in Hawaii is about 36¢ per kWh. 

The capital cost of the batteries included in a residential off-grid solar plus batteries system currently cost about $500 per kWh, according to Moody’s. To achieve cost parity with the grid, the capital cost of batteries would need to decline to about $20 per kWh, based on Moody’s calculations.

Absent a major technological breakthrough, battery costs are likely to remain above $20 per kWh for several decades. In 2012, the U.S. Energy Information Administration projected that battery costs would fall as low as $135 per kWh by 2035 in the best case scenario.