Levelized Cost of Storage Analysis 1.0

Nov 17 2015

Select energy storage technologies are cost-competitive with certain conventional alternatives in a number of specialized power grid uses, according to Lazard’s first Levelized Cost of Storage Analysis (LCOS 1.0), an in-depth study comparing the costs of various energy storage technologies for particular uses.

“Although in its formative stages, the energy storage industry appears to be at an inflection point, much like that experienced by the renewable energy industry around the time we created the LCOE study eight years ago,” said George Bilicic, Vice Chairman and Global Head of Lazard’s Power, Energy & Infrastructure Group. “Based on our analysis of storage technologies and our experience with LCOE, we expect to see rapid declines in the costs of energy storage.” 

LCOS 1.0, conducted with support from Enovation Partners, is an analytically rigorous study of the major energy storage technologies in the context of their various uses, from large-scale, power grid-oriented applications to small-scale, residential applications. Its purpose is to compare the cost-effectiveness of each technology on an “apples to apples” basis within applications, and to compare each application to conventional alternatives.

Highlights from the study include:

Even without subsidies, certain storage technologies are already cost-competitive with certain conventional alternatives (for example, lithium-ion batteries for certain power grid support applications). Other storage technologies are close to being cost-competitive in other applications, and costs are expected to decline in coming years.

The transformational scenarios envisioned by some renewable energy advocates – such as residential energy storage systems paired with solar panels to take consumers “off the grid” – are still very expensive without subsidies.

If industry projections materialize over the next five years, cost-effective energy storage technologies will have increasingly broad applications across the power grid, such as providing an alternative to conventional gas-fired peaking plants in certain areas.


View the Executive Summary


View the Study