1

2018 U.S. Utility-Scale 

Photovoltaics-Plus-Energy 

Storage System Costs Benchmark

Ran Fu, Timothy Remo, and Robert Margolis

October 2018 

NREL/PR-6A20-72401
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Contents

• Introduction

• Standalone Energy Storage Cost Model

• PV Plus Energy Storage Cost Model

• Summary 
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• NREL has been modeling U.S. photovoltaic (PV) system 

costs since 2009. 

• Interest in combining utility-scale PV and energy storage 

systems as “PV-plus-storage ” has been increasing in order 

to maintain the value of PV production and capture new 

revenue sources (i.e. ancillary services, distribution and 

transmission deferrals, etc.). 

• Although there are many utility-scale PV systems and a 

growing number of standalone utility-scale storage systems, 

there are very few co-located utility-scale PV plus storage 

systems in the U.S. 

• In this study we developed new bottom-up cost models to 

estimate the PV-plus-storage systems for various 

configurations.

Introduction
4

Introduction

Based on the Department of Energy Global Energy Storage Database, lithium-ion battery 

systems had an average duration of 1.6 hours and an average power rating of 2.8 MW 

per system. This report focuses on PV-plus-storage systems using Li-ion batteries.

Fig. Energy storage application by technology, worldwide (1958 – 2017).
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Introduction

The US is the world’s leader in lithium-ion storage deployment, mostly because of 

utility-scale storage systems. Between 2008 and 2017 it accounted for 40% of cumulative 

global Li-ion capacity (DOE Energy Storage Database 2018).

Fig. Li-ion storage deployment by region, 2008–2017. 
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Introduction

Utility-scale battery storage systems in the US (>1 MW, 30 mins to 4 hours duration) 

using lithium-ion batteries had an average duration of ~30 mins and an average power 

rating of 10 MW per system. For the baseline case, we use 4-hour storage according to 

the California Public Utilities Commission’s “4-hour rule” (Denholm et al. 2017). 

Fig. U.S. lithium-ion battery storage (2008 – 2016)
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Introduction

This study uses bottom-up modeling to benchmark the installed costs of three different 

PV-plus-storage configurations. 

Type PV and storage in the same 

location (co-located)?

Connected to

Standalone No Grid only

DC-coupled Yes Grid and PV

AC-coupled Yes Grid and PV

In the report, we benchmarked: 

• Standalone 60-MW/240-MWh energy storage system;

• Co-located, DC-coupled PV (100 MW) plus storage (60 MW/240 MWh) system;

• Co-located, AC-coupled PV (100 MW) plus storage (60 MW/240 MWh) system;

• PV (100 MW) plus storage (60 MW/240 MWh) system with PV and storage 

components sited in different locations.
8

Contents

• Introduction

• Standalone Energy Storage Cost Model

• PV Plus Energy Storage Cost Model

• Summary 
9

Energy Storage Cost Model

Fig. Structure of the bottom-up storage cost model.

Like our PV system cost models, this new energy storage cost model uses a bottom-up approach to 

summarize all the cost components, including EPC and developer costs. 
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Energy Storage Cost Model

Fig. Standalone utility-scale lithium-ion battery energy storage components.

A typical battery energy storage system is composed of battery racking, battery 

containers, power conversion systems, and step-up transformers.
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Energy Storage Cost Model Inputs

Category Modeled Input Description Sources

Battery total size 60 MW DC A baseline case to match a 100-MW PV system Denholm (2017), NREL (2018)

Battery size per 

container 5 MWh per 40’ container To compute the number of containers NREL (2018) 

Li-ion battery price $209/kWh

Ex-factory gate (first buyer) prices. We use an aggregated Li-ion 

battery price in the model, and cell types for different durations 

are not included.

NREL (2018), Curry (2017)

Duration 0.5 to 4 hours Duration determines energy (MWh) DOE Energy Storage Database (2018)

Battery Central 

inverter price $0.07/W Ex-factory gate (first buyer) prices Gupta (2018)

Inverter size 2.5 MW per inverter Used to determine the number of battery inverters NREL (2018) 

Transformer size 2.5 MW per step-up transformer Used to determine the number of transformers NREL (2018) 

Foundation 76,800 square feet Determined by the number of containers, inverters, transformers, 

and the spacing between containers RS Mean (2017), NREL (2018)

Installation labor Non-union at rates taken from BLS 

statistics survey average by state

Modeled labor rate assumes non-union and union labor and 

depends on state; national benchmark uses weighted average of 

state rates

BLS (2018), NREL (2018)

Sales tax 7.5% Model assumption. Determined by the sales tax in California NREL (2018) 

EPC overhead and 

profit

8.67% for equipment and material; 

23%–69% for labor costs; varies by 

system size, labor activity, and 

location 

Costs associated with EPC SG&A, warehousing, shipping, and 

logistics Fu (2017)

Developer 

overhead 3% of total installation cost

Includes overhead expenses such as payroll, facilities, travel, 

legal fees, administrative, business development, finance, and 

other corporate functions

Fu (2017)

Permitting and 

interconnection $0.03 to $0.04/W For construction permits fee, interconnection study, 

interconnection inspection, and interconnection fee NREL (2018)

Contingency 3% Estimated as markup on the total EPC cost Fu (2017)

EPC/Developer 

Net Profit 5% Applies a percentage margin to all costs including hardware, 

installation labor, EPC overhead, developer overhead, etc. Fu (2017)
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Energy Storage Cost Model Results

Fig. U.S. utility-scale lithium-ion battery storage cost (60 MWdc)

Energy storage cost ($/kWh) = battery cost ($/kWh) + other cost components ($) ÷

storage system size (kW) ÷ duration (hours).
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Energy Storage Cost Model Results

60-MW, 4-hour Duration, 240-MWh 60-MW, 2-hour Duration, 120-MWh 60-MW, 1-hour Duration, 60-MWh 60-MW, 0.5-hour Duration, 30-MWh

Model 

Component Total Cost ($) $/kWh $/W Total Cost ($) $/kWh $/W Total Cost ($) $/kWh $/W Total Cost ($) $/kWh $/W

Lithium-ion 

Battery 50,160,000 209 0.84 25,080,000 209 0.42 12,540,000 209 0.21 6,270,000 209 0.10

Battery Central 

Inverter 4,200,000 18 0.07 4,200,000 35 0.07 4,200,000 70 0.07 4,200,000 140 0.07

Structural BOS 3,121,131 13 0.05 1,813,452 15 0.03 1,159,612 19 0.02 832,692 28 0.01

Electrical BOS 8,602,825 36 0.14 6,119,167 51 0.10 4,877,337 81 0.08 4,256,423 142 0.07

Installation Labor 

& Equipment 5,479,149 23 0.09 4,322,275 36 0.07 3,743,838 62 0.06 3,454,619 115 0.06

EPC Overhead 2,775,545 12 0.05 1,948,565 16 0.03 1,535,075 26 0.03 1,328,330 44 0.02

Sale Tax 5,293,460 22 0.09 3,083,292 26 0.05 1,978,209 33 0.03 1,425,667 48 0.02

∑ EPC Cost 79,632,110 332 1.33 46,566,751 388 0.78 30,034,071 501 0.50 21,767,732 726 0.36

Land acquisition 250,000 1 0.00 250,000 2 0.00 250,000 4 0.00 250,000 8 0.00

Permitting fee 295,289 1 0.00 295,289 2 0.00 295,289 5 0.00 295,289 10 0.00

Interconnection 

fee 1,802,363 8 0.03 1,802,363 15 0.03 1,802,363 30 0.03 1,802,363 60 0.03

Contingency 2,477,135 10 0.04 1,476,303 12 0.02 975,887 16 0.02 725,679 24 0.01

Developer 

overhead 2,477,135 10 0.04 1,476,303 12 0.02 975,887 16 0.02 725,679 24 0.01

EPC/developer 

net profit 4,346,702 18 0.07 2,593,350 22 0.04 1,716,675 29 0.03 1,278,337 43 0.02

∑ Developer cost 11,648,623 49 0.19 7,893,608 66 0.13 6,016,101 100 0.10 5,077,347 169 0.08

∑ Total energy 

storage system 

cost 91,280,733 380 1.52 54,460,359 454 0.91 36,050,172 601 0.60 26,845,079 895 0.45

Table. Detailed Cost Breakdown for a 60-MW U.S. Li-Ion Storage System
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Energy Storage Cost Model Results

There are three types of costs when duration varies:

1) For battery itself, because its cost remains constant at $209/kWh in the 

model regardless of the system’s duration or energy size (MWh), both “total 

cost” and “$/W” metric have the linear relationship with the MWh size. 

2) For battery central inverter, because its cost remains constant at $0.7/W 

in the model regardless of the system’s duration or energy size (MWh), 

“total cost” metric remains constant for the constant power size (60-MW). 

However, the “$/kWh” metric has the linear relationship with the MWh size. 

3) For other cost components, their costs in terms of energy metric ($/kWh) 

and power metric ($/W) do not have a linear relationship with the system’s 

duration. This result is because on one hand, the number of storage 

containers is driven by energy size (5 MWh per container in the model) 

instead of power size; on the other hand, some other cost items such as site 

preparation and number of transformers remain constant for the constant 

power size (60-MW). Thus, the mixed cost items do not present the linear 

relationship that can be found in 1) and 2). 
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Contents

• Introduction

• Standalone Energy Storage Cost Model

• PV Plus Energy Storage Cost Model

• Summary 
16

PV Plus Energy Storage Cost Model

1) A DC-coupled system uses only one single bidirectional inverter, thus reducing the 

costs for inverter, inverter wiring, and inverter housing.

2) Because of the extra conversion between DC and AC, an AC-coupled system may 

have lower roundtrip efficiency for battery charging compared with a DC-coupled 

system, which charges the battery directly. 

3) Because the battery is connected directly to the solar array, excess PV generation 

that would otherwise be clipped by an AC-coupled system at the inverter level can be 

sent directly to the battery, which could improve system economics (DiOrio 2018).
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PV Plus Energy Storage Cost Model

1) Because battery racks are not directly connected to the PV system, AC-coupled system 

can use large size of battery racks and thus reduce the number of HVAC and fire 

suppression systems in the containers.

2) For a retrofit (adding battery storage to an existing PV array), an AC-coupled battery 

may be more practical than a DC-coupled battery, which requires installers to replace 

the existing PV inverter with a bidirectional inverter. 

3) For AC-coupled systems, installers have more flexibility to adjust the location of 

batteries. This design flexibility makes the preventative and corrective maintenance 

easier since the crew does not have to go into the PV field. 
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PV Plus Energy Storage Cost Model

Category Colocated PV plus storage PV plus storage in different sites

Site preparation Once Twice

Land acquisition cost Lower Higher

Hardware sharing between PV 

and energy storage

Yes (step-up transformer, switchgear, 

monitor, and controls)

No

Installation labor cost Lower (due to hardware sharing and 

single labor mobilization)

Higher

EPC/developer overhead and 

profit

Lower (due to lower labor cost, BOS, 

and total system cost)

Higher

Interconnection and permitting Once Twice

Category DC coupled energy storage 

configuration

AC coupled energy storage 

configuration

Number of inverters 1 (bidirectional inverter for battery) 2 (bidirectional inverter for battery plus gridtied inverter for PV). Thus, more costs for 

inverter, inverter wiring, and inverter housing.

Battery rack size Smaller (since battery is directly 

connected to PV). Thus, requires 

more HVAC and fire suppression 

systems.

Larger

Structural BOS More (due to smaller battery rack size) Less

Electrical BOS Less (but needs additional DC-to-DC 

converters)

More (due to additional wiring for inverters)
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PV Plus Energy Storage Cost Model Results

Co-located PV plus battery system can share several major electrical hardware components, such as 

the step-up transformer, switchgear, and controls. Also, co-location can reduce the “Soft Cost” 

including site preparation, land acquisition, installation labor, permitting, interconnection, and 

overhead and profit for both the EPC and the developer. 
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PV Plus Energy Storage Cost Model Results

Model Component Total Cost

100-MW PV Plus 60-MW/240-

MWh Battery, DC-Coupled, Colocated

100-MW PV Plus 60-MW/240-

MWh Battery, AC-Coupled, Colocated

100-MW PV Plus 60-MW/240-

MWh Battery, In Different Sites

PV module $35,000,000 $35,000,000 $35,000,000 

Lithium-ion battery $50,160,000 $50,160,000 $50,160,000 

Solar inverter n/a $6,153,846 $6,153,846 

Bidirectional inverter $4,200,000 $4,200,000 $4,200,000 

Structural BOS $18,346,829 $17,685,150 $17,735,564 

Electrical BOS $12,987,780 $13,115,425 $18,649,611 

Installation labor & equipment $18,863,868.05 $16,326,680.01 $19,058,910 

EPC overhead $9,879,642 $8,550,831 $9,981,792 

Sale tax $9,178,323 $9,605,687 $10,030,372 

∑ EPC Cost $158,616,442 $160,797,619 $170,970,095 

Land acquisition $3,000,000 $3,000,000 $3,250,000 

Permitting fee $295,289 $295,289 $590,578 

Interconnection fee $2,919,545 $2,919,545 $4,721,908 

Transmission line $1,883,302 $1,883,302 $1,883,302 

Contingency $5,001,437 $5,066,873 $5,455,816 

Developer overhead $5,001,437 $5,066,873 $5,455,816 

EPC/developer net profit $8,835,873 $8,951,475 $9,616,376 

∑ Developer Cost $26,936,884 $27,183,357 $30,973,796 

∑ Total Energy Storage System Cost $185,553,326 $187,980,975 $201,943,890 

Table. Detailed Cost Breakdown for Utility-Scale Li-ion PV-Plus-Storage System 
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Contents

• Introduction

• Standalone Energy Storage Cost Model

• PV Plus Energy Storage Cost Model

• Summary
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• US Utility-scale standalone energy and PV-plus-storage system 

cost models have been developed (based on lithium-ion batteries) 

to benchmark the installed system costs for co-located PV-plusstorage vs. PV and storage sited separately, and DC vs. AC 

coupling configurations for the co-location case.

• Co-locating the PV and storage subsystems produces cost 

savings by reducing costs related to site preparation, land 

acquisition, permitting, interconnection, installation labor, 

hardware (via sharing of hardware such as switchgears, 

transformers, and controls), and related overhead and profit. The 

cost of the co-located, DC-coupled system is 8% lower than the 

cost of the system with PV and storage sited separately, and the 

cost of the co-located, AC-coupled system is 7% lower.

• DC-coupling and AC-coupling have different cost categories due 

to number of inverters, battery rack size, DC-to-DC converters, 

labor costs, and related EPC overhead. 

Summary
23

Q&A

Contact the authors: 

• Ran Fu, Ran.Fu@nrel.gov

• Timothy Remo, Timothy.Remo@nrel.gov

• Robert Margolis, Robert.Margolis@nrel.gov

This work was authored by the National Renewable Energy Laboratory, operated by Alliance for 

Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DEAC36-08GO28308. Funding provided by U.S. Department of Energy Office of Energy Efficiency 

and Renewable Energy Solar Energy Technologies Office. The views expressed in the article 

do not necessarily represent the views of the DOE or the U.S. Government. The U.S. 

Government retains and the publisher, by accepting the article for publication, acknowledges 

that the U.S. Government retains a nonexclusive, paid-up, irrevocable, worldwide license to 

publish or reproduce the published form of this work, or allow others to do so, for U.S. 

Government purposes.
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