About the LCOS Calculator
Levelized Cost of Storage (LCOS) is the total lifetime cost of a battery energy storage system (BESS) divided by its total lifetime energy throughput, expressed in ₹/kWh delivered. It normalises for cycle life, efficiency losses, and degradation — making different chemistries and use cases directly comparable.
Formula
LCOS = (Capex + Σ O&Mₜ/(1+r)ᵗ + Σ Replacement_cost/(1+r)ᵗ) ÷ Σ Energy_delivered_t/(1+r)ᵗ
- Capex
- Initial BESS installed cost (₹)
- O&Mₜ
- Annual O&M including BMS, cooling, insurance (₹)
- Replacement_cost
- Battery pack replacement if cycle life < project life (₹)
- Energy_delivered_t
- Annual kWh discharged, declining as capacity fades (kWh)
How to calculate it
- 1Determine total cycle life of the battery (e.g. 4,000 cycles for LFP at 80% DoD).
- 2Calculate annual cycles from the use case (daily cycling = 365 cycles/year).
- 3Estimate calendar life and whether a replacement is needed within the project horizon.
- 4Model capacity fade (typically 20–30% over the rated cycle life) to get declining annual throughput.
- 5Divide PV of total costs by PV of total discounted throughput.
Worked example
A 500 kWh LFP BESS: capex ₹2 Cr (₹40/Wh), round-trip efficiency 93%, 4,000-cycle life at 80% DoD, O&M ₹3 L/year. With 1 cycle/day, cycle life lasts ~11 years → replacement at year 11. Total 25-year throughput ~3.5 M kWh delivered. At 8% WACC, LCOS ≈ ₹9–12/kWh — viable when peak-shaving savings or ancillary revenue exceed that figure.
What you can calculate
- LCOS ₹/kWh
- 25-year model
- Cycle throughput
- Bankability
Frequently asked questions
What LCOS is needed for BESS to be profitable in India?
For peak-shaving applications, BESS is profitable when LCOS < the peak-vs-off-peak tariff differential. In many states, peak demand charges exceed ₹15/kVA/month, making LCOSs of ₹10–14/kWh viable. For solar firming and PPA applications, the spread between the firmed PPA rate and the plain-solar rate needs to exceed the LCOS.
How does LFP compare to NMC on LCOS?
LFP (lithium iron phosphate) typically has a higher capex per kWh but far more cycles (4,000–6,000 vs 1,000–2,000 for NMC) and better thermal stability. The longer cycle life reduces LCOS significantly for high-cycling applications. NMC can be competitive at lower capex for infrequent-cycling (seasonal or backup) uses.
What is the difference between BESS capacity and BESS energy?
BESS capacity (kW or MW) is the maximum rate of charge or discharge — how fast it can deliver or absorb power. BESS energy (kWh or MWh) is how much total energy it stores. A 1 MW / 2 MWh BESS can deliver 1 MW for 2 hours. Both matter: power capacity determines peak-shaving headroom; energy capacity determines how long the firming or backup lasts.
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