Battery Energy Arbitrage Margin Calculator

Calculate per-cycle and optional annualised gross margin for battery arbitrage given off-peak purchase cost, peak revenue, efficiency, and wear costs.

Delivered energy to the grid or load during the peak window.
Off-peak purchase cost including transmission and fees.
Peak selling price or avoided tariff during discharge.
Total AC-to-AC efficiency for the charge and discharge cycle.
Defaults to $0. Covers augmentation reserves, wear, or market fees per discharged MWh.
Defaults to 0. Used to annualise margin if provided.

For preliminary storage economics; combine with full LCOS and degradation modelling before investment decisions.

Examples

  • 2.5 MWh discharged, $45/MWh charge, $145/MWh discharge, 86% efficiency, $6/MWh opex, 280 cycles ⇒ $145.68 per-cycle margin and $40,790.40 annual margin
  • 1.8 MWh discharged, $32/MWh charge, $110/MWh discharge, 90% efficiency, no opex ⇒ $109.60 per-cycle margin

FAQ

Does this include degradation reserve costs?

Yes when you enter a variable operating cost per discharged MWh. Include augmentation accruals, round-trip losses beyond energy cost, or market fees there.

How should I set the discharge energy?

Use the expected delivered MWh during peak windows. If you have usable capacity in MWh and a planned depth of discharge, multiply them to obtain discharged energy.

What if prices are indexed hourly?

Average the hours included in the charge and discharge blocks, weighted by energy. You can also run the calculator multiple times for different price pairs and sum the margins.

Why is gross margin negative?

Negative outputs indicate the spread between charge and discharge prices is insufficient after accounting for efficiency losses and variable costs. Review tariff structures or ancillary services revenue to close the gap.

Additional Information

  • Charge energy equals discharged MWh divided by round-trip efficiency.
  • Gross margin subtracts purchased energy and variable costs from peak revenue.
  • Annual margin multiplies per-cycle margin by the optional cycle frequency.

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