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NREL: US utility-scale energy storage costs grew 11-13% in Q1 2022


Energy storage costs in the US grew 13% from Q1 2021 to Q1 2022, said the National Renewable Energy Laboratory (NREL) in a cost benchmarking analysis.

The research laboratory has revealed the results of its ‘U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, With Minimum Sustainable Price Analysis: Q1 2022‘ report.

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For standalone energy storage, NREL said that the costs benchmark grew 2% year-on-year for residential systems to US$1,503/kWh and 13% for utility-scale to US$446/kWh.

Both figures are modelled market price (MMP) which it uses alongside a new, minimum sustainable price (MSP). MMP is simply the sales price that a developer would charge while MSP is a theoretical construct meant to capture the long-term cost impacts of technological evolution while muting the impact of policy and short-term market fluctuations.

It uses a 5kW/12.5kWh benchmark for residential and a 60MW/240MWh benchmark for utility-scale, clearly modelled along the lines of the California market where four-hour durations have become the norm.

For residential, commercial and utility-scale the MSP is around 10% lower than the MSP. The commercial MMP benchmark in Q1 2022 was US$672/kWh, in between the two other sectors, but a change in methodology between 2021 and 2022 means the years cannot be compared directly, it added.

For solar-plus-storage, the MMP benchmark for residential systems grew 6% year-on-year to US$38,295 while utility-scale costs grew 11% to a benchmark of US$195 million. Commercial was US$1.44 million.

Within solar-plus-storage, the MMP benchmark is 13-15% higher than the MSP for all three segments.

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At the time of writing, Europe had had its most successful year in terms of Power Purchase Agreements (PPAs) with a record 7.8GW of renewable energy contracts signed. As we gather in May 2024 for the third edition of the Renewable Energy Revenues Summit, the energy landscape continues to evolve rapidly, influenced by the beating drum of climate change, volatility around power prices and the need to decarbonise power procurement as well as generation.
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Returning for its 11th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.

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