Is energy storage expensive?

Yes, energy storage is expensive, the price depends on technology, scale, power and capacity. The price of BESS residential storage systems starts from 300 USD/kWh to 1800 USD/kWh for a low Voltage 48V-96V system with BMS. High Voltage systems 400-900V price varies between 800 USD/kWh - 2000 USD/kWh with PCS, EMS and installation, the most popular technology is Li-Ion and LFP. Commercial and Industrial Energy Storage price depends on EMS possibilities and is between 34 000 -60 000 USD/ 100 kWh with BMS, cheaper solutions are directly from the manufacturer, and more expensive are turnkey solutions with the installation. The average price of utility-scale 5 MWh+ solutions varies between 280 000 - 350 000 USD/MWh.
December 1, 2022
written by Kamil Talar, MSc.
energy storage prices

Why energy storage is so expensive?

There are several energy storage methods, and all of them are expensive, because of enormous initial investment costs due to increasing raw materials cost such as lithium(BESS), the cost of advanced new technology (Hydrogen), and construction costs (CAES, PSH). I can divide energy storage methods into groups.

The first group gathers methods with substantial initial investment costs and low operating costs (high CAPEX/low OPEX), a lifetime of 30+ years these are:

  • Pumped hydro-power storage
  • Compressed air energy storage
  • Bidirectional Hydrogen with fuel cells

Second group methods have moderate CAPEX per kWh and moderate OPEX, a lifetime of 10-15 years :

  • LFP Batteries
  • Vanadium RF Battery Storage

Third group methods are technologies with lower CAPEX and lower OPEX, but with a lifetime of 3-7 years:

  • Lead-Acid battery
  • Sodium-Sulphur battery
  • Zinc-ion battery

In 2022 at Intersolar Europe (ICM München) I was very surprised by Scandinavian zinc-ion cells Enerpoly. It is much cheaper than LFP, by BMS system lifetime may lengthen, it can be an important energy storage method in the short future.


Will energy storage price increase?

Yes, energy storage (BESS) will increase in price in a short term, energy storage increase in price is caused by the inflation and increasing electrochemical cells demand. Increase in the demand for cells is due to:

  •  residential and commercial energy storage growing popularity
  • EV manufacturing increase
  • low number of cellsproducers
  • utility energy storage projects growth

CAES, Hydrogen and PHS prices will grow slower due to moderate demand.

;ithium price
how much cost battery 1 MW


Which energy storage technology is the most expensive?

We can distinguish two factors that show energy storage price, these are power (kW) and energy (kWh).
Power factor:
In 2022 the most expensive energy storage technology is Hydrogen with an average power CAPEX (USD/kW) 3117 USD/kW.
Energy factor:
In 2022 the most expensive energy storage technology is Vanadium RF Battery Storage with an average energy CAPEX (USD/kW) 517 USD/kW.

According to Assets-Global report in 2030 the most expensive energy storage method will be Pumped-storage hydroelectricity with:

  • avg. power CAPEX 2046 USD/kW
  • avg. energy CAPEX 511 USD/kWh

Think now, we take under consideration short-term, we can analyze long-term effective CAPEX. The situation in the long term is completely different!
Pumped-storage hydroelectricity is the cheapest in case of effective CAPEX (USD/kW base on PSH life of 80 years and 6% discount rate).


How much does a 1 MW battery cost?

1 MWh / 1MW battery (LFP) with BMS costs 217 390 USD in 2022 in Europe, we have to add to this costs extra costs to get the price of BESS, such as:

  • PCS
  • EMS
  • HVAC
  • fire protection
  • DC and AC cables
  • transformers
  • ADR transportation

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