How is the battery storage only $0.013 per kWh? Is that a misprint and they meant $0.13 per kWh? Or is there some fancy accounting where they're storing only a small percentage of the total energy output and giving a diluted price with the partial storage cost spread over the total output? Or is it truly possible with massive scale to achieve battery costs this low? I can't see how this adds up without some sleight of hand, as the gigafactory production cost isn't even nearly this low yet?
Right, I get that—but still don't get the math. Let's say they're buying this capacity at $300 per kWh of capacity, that the batteries last six years on average with a daily cycle, for a total of 2190 cycles. Amortizing that $300 kWh cost over 2190 cycles is $0.137 per kWh. In other words, holding the other constants the same, this company is suggesting $30 kWh batteries, which is just not yet possible as far as I'm aware. That makes me suspect they're actually only storing like 10% capacity then amortizing the cost of storage across total output, as I can't understand how else the numbers add up. Any ideas?
The mythical $100/kWh figure for car batteries is for the pack cost, not the cells. Much of that cost is focused on a compact, lightweight solution for cell cooling, voltage balancing for ~100 batteries in series, etc.
Utility installations have much cheaper solutions for cooling, the balancing is much easier with lots of parallel cells, and even the chemistry benefits from smaller charge/discharge currents.
We're not down to $30/kWh yet, but we're not that far off. Certainly well below $300.
Yes, there are two things that probably contribute here.
One is (as you guessed initially) "storing only a small percentage of the total energy output and giving a diluted price with the partial storage cost spread over the total output." The majority of the solar generation can be consumed immediately without taking a trip through the battery. The battery capacity is needed to serve peak demand periods in the late afternoon/early evening, which last just a few hours.
The other is that you are probably lowballing the number of charge/discharge cycles at 2190. Unlike EV batteries, stationary batteries for grid demand don't ever need to "supercharge" at high rates or rapidly discharge for high acceleration. Careful moderation of charge/discharge rates can give double or more lifetime compared to identical batteries that undergo fast charging and discharging.
Later in the article they clarify that the batteries cost $0.187/kWh. However, the owner of said battery will be able to sell energy storage to the grid operator. I also assume that there is a synergy, in that the solar side of the installation is more valuable.
I'm guessing if they don't count depreciation and charge the batteries when the price is negative, it might make sense. But otherwise that is an astounding claim backed by zero evidence.
