The average energy capacity cost of utility-scale battery storage in the United States has fallen rapidly from $2152 per kWh in 2015 to $625/kWh in 2018 according to the US Energy Information Administration’s Annual Electric Generator report.
At the end of 2018, the USA had 869 MW of installed battery power capacity and 1236 MWh of battery energy capacity.
To understand how battery storage costs vary depending on a battery unit's location, the US Energy Information Administration grouped cost data into regions based on RTOs/ISOs or (such as in the case of California) aggregated different entities in the state to avoid disclosing respondents’ confidential information in areas with fewer battery systems. At the regional level, the 2013 to 2018 average utility-scale battery costs ranged from $1946/kWh in the PJM Interconnection, which manages the electric power grid in 13 eastern and midwestern states and the District of Columbia, to as low as $947/kWh in Hawaii.
Although battery storage costs are usually published in terms of energy capacity (cost per kWh), they can also be expressed in terms of power capacity (cost per kW). In power capacity cost terms, short-duration batteries cost less than long-duration batteries. In energy capacity cost terms, long-duration batteries are less expensive.
Most of the batteries installed in PJM are used for power applications, such as frequency regulation, which helps maintain the grid’s electric frequency on a second-to-second basis. PJM prioritises power capabilities that use shorter durations over energy use cases that store large amounts of energy over time. For this reason, the power capacity installed cost is a better indicator of price for value in PJM.
California had the most installed battery capacity of any state in 2019. The average battery storage cost in California was $1522/kWh. About two-thirds of battery storage capacity in California is used for frequency regulation. Batteries in the state also provide energy-oriented services, including ancillary services, black start services, and easing transmission congestion.
According to EIA data, the USA added 152 MW of battery storage capacity in 2019 and added an additional 301 MW in 2020 through July 2020. EIA also collects data on planned future battery capacity additions. Based on planned capacity additions data reported to EIA by developers and power plant owners as of July 2020, EIA expects battery storage to increase by more than 6900 MW in the next few years. About 2300 MW of the 6900 MW of planned capacity was reported to EIA between April and June 2020.
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