Energy Storage Cost Calculator
The Sticker Price Isn't the Real Cost of Storage
A battery system's upfront price divided by its usable capacity gives a simple dollar-per-kWh figure, but that number treats the battery as if it only gets used once. Batteries are rated for a finite number of charge-discharge cycles, and spreading the total cost across every kWh the battery will deliver over its whole lifetime — the levelized cost of storage — gives a much more honest comparison between systems with different price tags and different cycle-life ratings.
The Formula
Levelized Cost of Storage (LCOS) = Total Cost / (Capacity × Cycle Life)
Where This Is Useful
- Comparing battery chemistries — a battery with a higher upfront cost per kWh can still have a lower lifetime cost if its cycle life is significantly longer.
- Justifying storage investment — LCOS is directly comparable to the utility rate being avoided, showing whether storage is economical over its lifetime.
- Vendor evaluation — normalize competing storage quotes onto the same lifetime-cost basis rather than comparing sticker prices alone.
Worked Example
A $12,000 battery system with 13.5 kWh of usable capacity and a rated cycle life of 6,000 cycles:
| Total cost | Usable capacity | Cost per kWh | Cycle life | Levelized cost of storage |
|---|---|---|---|---|
| $12,000.00 | 13.5 kWh | $888.89/kWh | 6,000 cycles | $0.1481/kWh delivered |
LCOS only accounts for the battery's own cost, not the electricity cost of charging it — compare it against the spread between off-peak and peak utility rates, not the full retail rate, when evaluating arbitrage value.
How to Use This Calculator
- Enter the Total System Cost in dollars.
- Enter the Usable Capacity in kWh.
- Optionally enter the Cycle Life to also get the levelized cost of storage over the battery's lifetime.
- Select Calculate to see cost per kWh and, if cycle life was entered, the levelized cost of storage.
Related Calculations
Size the battery this cost applies to with the Battery Backup Calculator, or check how it fits into a full off-grid setup with the Off-Grid System Size Calculator.