U.S. utility-scale battery storage costs decreased nearly 70% between 2015 and 2018

The average cost of utility-scale battery storage for energy capacity decreased steadily from $2,152 per kilowatthour (kWh) in 2015 to $625 / kWh in 2018, according to the U.S. Energy Information Administration.

Battery storage systems store electricity generated or pulled directly from the electric power grid by generators and later redistribute the power as necessary.

The United States had 869 megawatts (MW) of battery power capacity installed at the end of 2018 (the maximum amount of power a battery can provide at a given moment) and 1,236 megawatthours (MWh) of battery power capacity (the total amount of energy a battery can store).

Storage costs for batteries differ by area and application. The service of the U.S. electrical grid is managed by independent system operators (ISOs) and regional transmission organizations (RTOs).

In order to explain how battery storage costs differ depending on the position of a battery cell, the U.S. Energy Information Administration (EIA) divided cost data into regions based on RTOs / ISOs or aggregated various agencies in the state (such as in the case of California) to avoid sharing the confidential information of respondents in areas with less battery systems.

At the regional level, the average utility-scale battery costs for the PJM Interconnection (PJM), which operates the electricity grid in 13 eastern and midwestern states and the District of Columbia, ranged from $1,946 / kWh in 2013 to 2018, to as low as $947 / kWh in Hawaii.

While the cost of storing batteries is commonly published in terms of energy capacity (cost per kilowatthour), it can also be expressed in terms of power capacity (cost per kilowatt). Short-duration batteries cost less than long-duration batteries in terms of energy capacity prices. Long-duration batteries are less costly in terms of energy capacity costs.

For power applications, most of the batteries mounted in PJM are used, such as frequency control, which helps keep the electric frequency of the grid on a second-to-second basis. PJM prioritizes energy capabilities that use shorter durations over instances of energy use that over time accumulate vast quantities of energy.

For this reason, the installed cost of the power capacity is a better price measure in PJM for value.

In 2019, California had the most battery capacity built of any state. In California, the average battery storage price was $1,522 / kWh. In California, nearly two-thirds of the battery storage capacity is used for frequency control. Energy-oriented services, including ancillary services, black start services and easing transmission congestion are also provided by batteries in the state.

The United States added 152 MW of battery storage capacity in 2019 and added an additional 301 MW  in 2020 through July 2020, according to EIA reports. EIA also gathers data on scheduled potential additions to battery power.

EIA expects battery storage to increase by more than 6,900 MW in the next few years, based on projected capacity addition data submitted to EIA by developers and power plant owners as of July 2020.

Of the 6,900 MW of planned battery storage capacity, approximately 2,300 MW was reported to the EIA between April and June 2020. To improve grid stability and durability, large battery storage systems are increasingly combined with renewable energy power plants.