We’ve mentioned in a previous post how the solar industry has benefitted through economy of scale bringing down prices.

This has been the number one factor in bringing down the price of lithium solar battery banks.

Bloomberg began keeping track of lithium battery prices eleven years ago. For the entire period, every year saw sizable declines in the price per kilowatt-hour of lithium battery storage.

In 2013, the price per kWh in US Dollars was over $700. Year-by-year, as lithium battery production surged, economy of scale brought down the price. By 2021, the price had fallen to US$137/kWh.

That’s a substantial cost reduction, to say the least.

However, it appears that economy of scale has reached its limits, with the price rising this year to US$151/kWh.

While some economic forecasters are hopeful that the 7% year-over-year increase in price is a one-off, other forecasters are pointing to a projected lack of supply – due to exploding demand – as the fuel for a new trend of ever increasing prices.

Our opinion is more in line with the latter. We believe that inflation is going to really hit hard, and that prices of solar equipment – including battery banks for solar energy storage – will soar in the coming years.

From Bloomberg:

“Lithium-ion battery pack prices have gone up 7% in 2022, marking the first time that prices have risen since BloombergNEF began its surveys in 2010.

The finding that average pack prices for electric vehicles (EVs) and battery energy storage systems (BESS) have increased globally in real terms to US$151/kWh confirms the consequences of what the industry has been confronted with in recent months. It follows years of consistent declines of close to 10% every 12 months.

Widely reported challenges have come from global battery supply chain constraints causing material and component cost rises, logistics issues caused by COVID-19 and soaring inflation.”

https://www.energy-storage.news/lithium-battery-pack-prices-go-up-for-first-time-since-bloombergnef-began-annual-survey/

You can read the full Bloomberg news story here.