Op-ed: Energy storage is cheap to build, expensive to run

Battery storage (systems that store electricity, often paired with solar) has been getting cheaper to build. Battery costs have dropped from $300-$400 per kilowatt-hour in the early 2010s to $180-$250 by 2023, with some industry estimates now near $125/kWh for large utility projects. That's made batteries look like an easy fix for backup power and managing energy costs.

But the upfront price tag only covers part of the picture. What matters more for figuring out true cost is the levelized cost of storage, a way of calculating what each unit of electricity from the battery actually costs once you account for its full lifespan. Two projects with identical equipment and installation costs can end up nearly 40% apart in real cost, depending on things like how long the battery is expected to last, how efficiently it charges and discharges, how often it's used, how much its capacity fades over time, and ongoing operating costs. Batteries also lose some capacity every year, typically 1 to 2.5%, so a system rated at a certain size on day one delivers less over time.

For a homeowner, the takeaway is that a home battery's sticker price doesn't tell the whole story. The warranty length, guaranteed efficiency, and expected capacity loss over the years matter just as much as the upfront cost when weighing whether a battery will actually save money over its lifetime.