Battery Degradation Reserve Requirement Calculator

Quantify the capital reserve required to top up a battery's usable capacity when degradation pushes it below your contractual target.

Usable AC energy deliverable per full discharge at beginning of life.
Forecast capacity retention without augmentation.
Capacity fraction you promise to maintain for contracts or compliance.
All-in capital to add one MWh of usable capacity at the planning horizon.
Defaults to 1 year if left blank.
Defaults to 365 if left blank. Used to express reserve per discharged MWh and per cycle.

For preliminary storage finance planning only; validate with detailed lifecycle cost models and vendor warranties before committing capital.

Examples

  • 200 MWh BESS, expected capacity 78%, target 90%, $55,000/MWh augmentation, 10 years, 320 cycles ⇒ Reserve fund $1,320,000 with $20.63/MWh accrual
  • 120 MWh system, expected 82%, target 85%, $42,000/MWh, defaults for time/cycles ⇒ Reserve fund $151,200 requiring $3.53/MWh

FAQ

What if my target capacity is lower than the expected degradation?

When the target retention is at or below the expected end-of-horizon capacity, the calculator reports that no reserve is required because you remain within guarantees without augmentation.

How should I choose the augmentation cost per MWh?

Use vendor quotes for module replacements plus labor, crane time, requalification testing, and balance-of-system upgrades. Applying a contingency on top of catalogue pricing makes the reserve more bankable.

Can I change the default cycle cadence?

Yes. Enter your own equivalent full cycles per year to align the reserve-per-MWh output with dispatch expectations for ancillary services, energy arbitrage, or hybrid applications.

Does this model account for partial augmentation staged across the horizon?

No. It assumes a single augmentation event at the end of the planning period. For phased upgrades, split the horizon into segments and run the calculator for each tranche before summing the reserves.

Additional Information

  • Capacity shortfall equals beginning-of-life usable MWh multiplied by the gap between target and expected capacity retention.
  • Reserve per discharged MWh assumes constant throughput using the provided cycle cadence and planning horizon.
  • Set augmentation cost to the turnkey spend required to install replacement modules, inclusive of balance-of-system and commissioning.

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