Battery storage’s emergence as a tool to boost grid reliability and a viable project finance opportunity is good news for utilities and grid operators, said Moody’s Investor Service in an infrastructure and project report on March 19.

The ratings agency noted that currently, lithium ion battery costs hover at about $ 400/kWh installed—the battery itself which is about $ 200/kWh, and the balance of the plant (with traditional electric components) at another $ 200/kWh. While that figure is the result of an already significant cost decline over the last several years, if current trends continue, costs will continue to decline to $ 100/kWh between 2020 and 2022.

The cost decline could translate to a “significant reduction in project costs, which will make storage applications more economically viable,” it said.

Cost declines for battery storage can be pegged to growing economies of scale in manufacturing and improvements in battery technology, Moody’s noted. The energy storage sector also has regulatory backing. Along with energy storage mandates in several states, including California, Massachusetts, New York, and Hawaii, a 30% investment tax credit is available for energy storage coupled with renewable generation at a federal level.…

Read More »