Levelized Cost of Storage (LCOS) Calculator

Discount capital, replacement, and operating costs against delivered energy to find the true cost per megawatt-hour of a battery or thermal storage project.

Total installed cost for the storage asset, including balance of plant.
Reserve for component swaps such as battery modules or power conversion.
Project year when the replacement spend occurs.
Labour, leases, insurance, and monitoring that repeat every year.
Consumables or throughput-based service charges per discharged MWh.
Net energy exported to the grid or load during year one.
Analysis horizon matching warranties or contract terms.
Weighted average cost of capital or hurdle rate in percent.
Expected fractional decline in delivered energy each year.
Salvage value or performance guarantee payment received in the final year.

Educational information only. Consult project finance professionals before committing capital.

Examples

  • $15,000,000 capex, $2,000,000 replacement in year 10, $250,000 fixed O&M, $4/MWh variable O&M, 12,000 MWh year-one output, 20-year life, 7% discount rate, 2% degradation, $1,000,000 residual ⇒ Levelized cost of storage: $170.83 per MWh
  • $450,000 capex, no mid-life replacement, $12,000 fixed O&M, $6/MWh variable cost, 1,800 MWh year-one throughput, 15-year life, 5% discount rate, 1.5% degradation, $50,000 residual ⇒ Levelized cost of storage: $38.24 per MWh

FAQ

How do I model multiple component replacements?

Sum the present value of each replacement event outside the tool and enter the total, or rerun the calculator for each event and add the discounted results to your analysis worksheet.

Should I use AC or DC energy throughput?

Use the net discharged energy measured at the point of interconnection or behind-the-meter load so the numerator and denominator reflect the same delivery point.

Does the discount rate already include financing costs?

Yes. Select a rate that reflects your weighted average cost of capital or required return so financing assumptions are embedded in the LCOS result.

Additional Information

  • Delivered energy is discounted alongside costs, mirroring the methodology recommended in levelized cost benchmarks by regulators and system operators.
  • Degradation compounds year over year, so even small percentages can materially raise the LCOS for high-cycle storage assets.
  • Residual value is treated as a credit in the final year and discounted back before reducing the total cost base.

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