Cost Analysis of Containerized Battery Energy Storage – Investment vs Return | PowerSync Energy

A containerized battery energy storage system is a modular energy storage system suitable for storing renewable energy, such as solar energy. It utilizes VRLA (value-regulated lead-acid) and lithium battery technologies to maximize energy storage capacity and allow a smooth integration with renewable energy systems.

A containerized battery energy storage system requires an upfront investment but offers long-term returns on that investment through energy savings. Below is an in-depth comparison between the initial investment and the potential returns of this system.

The Return-on-Investment Formula – Lifetime Savings

 In this example, we will focus on the return on investment for the battery energy storage system without factoring in the costs of a solar energy system or ongoing maintenance. We will also assume your solar energy system will completely replace your conventional electricity needs.

Suppose you purchase a 30-kWh containerized energy storage system for $12,000, including the module batteries added. Let’s say this storage system comes with a 15-year limited warranty. If you want to calculate the return on investment for it, you must first calculate the average cost of conventional electricity you would have over the next 15 years.

The formula in this scenario would be:

Utility Costs (for 15 years) – Cost of the Battery System = Return on Investment

Let’s plug in some real numbers to understand the returns better. The average American household pays about $200 to $300 monthly for electricity. So, if you pay an average of $250 per month for 15 years, the total electricity cost would be about $45,000. Let’s enter that number into the formula to see the cost savings:

$45,000 – $12,000 = $33,000 Return Over 15 years

However, you must also factor in additional expenses to make more accurate return calculations, such as maintenance fees, state permit fees, and installation costs. The good news is that all these extra expenses will add up to no more than a couple of thousand dollars at the most. That means your return would still be tens of thousands of dollars over the warranty period.

Besides, if you maintain your battery energy storage system, you may get more than 15 years of life out of it. That would drive up your return on investment even more.

The Formula for Breaking Even on Investment

How long will it take for you to make back the initial investment amount for purchasing the battery storage system? There is an easy formula for calculating that amount.

Cost of Battery System / Yearly Power Savings = Number of Years to Break Even

Using the previous example, you buy a battery energy storage system for $12,000, and your yearly utility costs are $3,000 ($250 per month * 12). Let us enter these numbers into the formula:

$12,000 / $3,000 = 4 Years to Break Even

Remember that your calculations may significantly differ based on your electricity consumption demands and the additional costs of maintenance, modules, and repairs over the life of the energy storage system. You may need to purchase a more expensive containerized battery energy storage system with a greater energy capacity to satisfy your power demands.