The Big Switch: Australia’s Electric Future

by Saul Griffith

Why does cost matter? We don’t care so much about the cost per kWh as much as the cost per kWh cycle. This is the cost of the battery per cycle of storage, measured in cents per kWh. A Tesla Powerwall in 2021 comes with a ten-year, roughly 3700-cycle warranty. To achieve these long lifetimes, perhaps only 80% of the battery capacity is used. This makes the maths pretty simple – we divide the cost by the useful component of the battery, and divide that by the cycle life, to give us an estimate of the cost per kWh of storage: $1000 ÷ 0.8 ÷ 3700 ≈ 34 cents per kWh. This is why we are on the cusp of a revolution, but not quite there yet. At 34 cents per kWh, these storage costs make electricity very expensive. If you pair it with solar at six cents per kWh and you need to store half of the energy for later, the total cost of providing 24/7 energy will average out to 23 cents per kWh. This is almost but not quite competitive with the grid in most places. If you are in a remote area, it is likely to be economic.