Levelized cost of storage (LCoS).

LCoS helps you identify how cost-effective a battery storage system can be in the long term. So you can base your choice of green batteries not only on sustainability, but also on a clear financial rationale. The result? More control over your investment and a step closer to a green future.

What is levelized cost of storage?

Levelized cost of storage (LCoS) is a measure that divides the total lifetime cost of a battery storage system by the amount of energy stored and delivered during that period. With this calculation, you can see how much it costs to store one kilowatt hour (kWh), taking into account all expenses such as capital expenditures, maintenance and operational costs. This allows you to transparently compare different options for green batteries and other energy storage systems.

A similar concept on the generation side is Levelized cost of energy (LCOE). Levelized cost of energy provides an estimate of the cost per kWh for generating energy, such as with solar or wind power. Whereas LCOE focuses on energy generation, LCoS provides a similar standard for energy storage. These two indicators provide a valuable look at the overall financial viability of a renewable energy system.

LCoS calculate

To calculate the levelized cost of storage, divide all the costs associated with the battery storage system by the total amount of energy the system can store and deliver over its lifetime. Here you consider not only the purchase and installation value, but also recurring maintenance and management expenses. In addition, it is wise to translate future costs and savings into their present value so that you can make a clean comparison between different storage solutions.

In practice, LCoS gives you a clear understanding of the true cost per kilowatt-hour you store with a battery storage system. This allows you to make an informed choice when investing in green batteries. In this way, LCoS ensures that you are not only looking at the purchase price, but also at the total long-term financial impact.

The importance of levelized cost of storage for BESS

For a battery energy storage system (BESS), the levelized cost of storage (LCoS) is a crucial measure. After all, a BESS aims to store energy safely and deploy it flexibly when needed. By dividing the total cost per kWh over the entire lifetime, you get a clear picture of the system's financial performance and profitability. That way, you can better assess whether the investment in green batteries will pay off in the long run.

When you choose a BESS with a low LCoS, you get more benefit from every kilowatt hour stored. This not only makes for a more favorable cost, but also a higher reliability of your energy supply. The lower the LCoS, the more you optimize the efficiency of your energy storage. Thus, you respond to the desire for sustainable investment without compromising the financial viability and efficiency of your project.

Factors affecting the LCoS

Determining the levelized cost of storage (LCoS) is related to several elements that make a battery energy system unique. By identifying these factors, you can make a measured choice of green batteries and optimize the efficiency of your energy storage.

• Acquisition cost: the initial investment for the battery storage technology, including equipment and installation, has a direct impact on the final LCoS.
• Service life and number of charge and discharge cycles: longer service life and more charge cycles reduce the cost per kWh by spreading the investment over a larger amount of stored energy.
• Maintenance and management: regular maintenance and efficient management reduce operational costs, leading to a more favorable LCoS over the entire life cycle.
• System efficiency: the more efficient the conversion and storage of energy, the fewer losses occur and the lower the LCoS ends up being.
• Capacity and scale: larger or scalable systems can often spread their costs better, leading to a relatively lower LCoS.

Favorable levelized cost of storage at Frax

Ultimately, green batteries are not just about environmental gains, but also about a solid financial foundation. A sharp levelized cost of storage (LCoS) shows that in the long run, you save costs and incur less risk because energy costs remain more stable and predictable. This gives you a sustainable energy solution that benefits both your budget and your carbon footprint.

Wondering how to optimize your storage costs? Then discover how Frax's solutions make a favorable LCoS possible for you. With high-quality and user-friendly battery storage systems, you can invest smarter in green energy. Contact us today to take your sustainable project to the next level.