Levelized Cost of Storage (LCOS)

Levelized Cost of Storage (LCOS)#

The levelized cost of storage (LCOS) is the total cost of the battery over its life expressed in cents per kilowatt-hour of electricity discharged by the battery. The LCOS takes into account the following:

  • Cost of installing, maintaining, and replacing the battery.

  • Cost of electricity to charge the battery.

  • Degradation of battery capacity over time.

SAM’s LCOS calculations are based on the method described in Schmidt, O.; Melchior, S.; Hawkes, A.; Staffel, I. (2019). Projecting the Future Levelized Cost of Electricity Storage Technologies. Joule. Vol 3 p 81-100.

For behind-the-meter battery storage applications, the cost of electricity to charge the battery is determined by the retail electricity rates defined on the Electricity Rates page. For front-of-meter applications, the cost depends on the retail rates defined on the Electricity Purchases page.