These are exciting times in the energy storage industry, with technology rapidly improving and costs falling fast as the sector scales up. A just-released report by Greentech Media (GTM) examines this in detail and shows how it's likely to continue.
Solar PV balance of system (BOS) costs have followed a learning curve, which has benefited storage projects by having an established ecosystem of best practices resulting in manageable BOS costs. Storage projects have experienced diminishing returns in BOS cost reductions (by $/kW magnitude) because they have piggybacked on solar’s progress, but the learning curve dynamics of percentage declines should still hold true for storage. GTM Research predicts that the next five years should see a 40% decline in storage BOS costs to values lower than $400/kW. During this time, the price difference between storage and PV inverters should also compress.
While the full report is not freely available, a GTM article on Monday provided a bit more information, such as that currently, "grid-scale energy storage balance-of-system costs average $670 per kilowatt." Also worth noting:
“While batteries remain the most expensive component of an energy storage system and have the most room for price declines, savings will be found across projects’ entire value chain,” said Luis Ortiz, lead author of the report.
GTM Research expects the largest BOS decline to come from hardware costs, particularly inverters...
...The next most promising area for BOS cost reductions is in soft costs.
“Soft costs have been an area targeted by U.S. solar developers as a ripe territory for significant improvements in the near future, and similar gains are expected to kick in for storage projects closer to 2020,” said Ortiz.
Overall, GTM's findings are good news, both for grid-scale energy storage and for clean power deployment in general.