Lithium Ion Batteries Guide
Last Updated: 15th Oct 2024
Lithium-ion (or Li-ion) batteries are a type of battery you get in your iPhone and laptop. They are also the type that is inside the Tesla Powerwall.
In fact, Tesla simply connects thousands of AA sized Lithium-ion cells together and assembles them into a liquid-cooled battery pack wrapped in a strong metal enclosure, which in turn is wrapped in their hallmark sleek white package.
But Tesla isn’t the only company manufacturing lithium-ion solar batteries and there are some good Tesla Powerwall alternatives available. For example, a Sungrow battery is significantly cheaper. This technology has become the most popular home energy storage technology in Australia.
This is mainly because lithium-ion batteries can be discharged deeper and have a longer lifetime than lead-acid batteries. They will give you around 4,000 – 6,000 cycles at 80% discharge – so they will have a lifespan of 13-18 years.
Their main drawback, at least at the moment, is that they are about 50% more expensive than lead-acid batteries for the same amount of storage. This is expected to change rapidly over the next few years as mass production of lithium-ion batteries (like at Tesla’s battery factory, the Gigafactory) significantly reduces the cost of lithium-ion storage.
Distinguishing between different types of lithium-ion batteries
There are two core lithium-ion battery technologies: NMC (Nickle Manganese Cobalt) and LFP (Lithium Iron Phosphate)
NMC battery technology, with its high energy density, is well suited for long range electric vehicles, whereas LFP technology is better suited for mid to low range EVs and residential storage applications.
The Tesla Powerwall 2 uses NMC technology. Brands such as Sungrow, BYD and Alpha ESS use LFP technology and like to point out that LiFePO is inherently safer because it is harder (but not impossible) to make them go into thermal runaway, otherwise known as exploding. Despite this, the Powerwall 2 has shown itself to be a very safe battery.
How much will a lithium-ion + solar panel setup cost?
This all depends on the brand of battery you choose to go with. As mentioned, there are a number of competitors in the lithium-ion energy storage space, with a great deal of variance in pricing-per-kWh.
Everyone seems to be hyped about the Tesla Powerwall, though – so I will use it in this example. A 13.5kWh Tesla Powerwall 2 will set you back around $15,500 fully installed as at October 2024.
To do a rough price calculation, a 6.6kW solar system costs roughly $6,300 on average in late 2024. If you add the Tesla Powerwall 2 price to this, you end up with a total cost of around $21,300. That assumes the installation is straightforward. A more complex install can cost more.
I’ll be the first to admit that around $21,000 is a lot of money for the average Australian to find, even if they’re extremely keen on adding battery storage to their solar power system. But consider the other benefits of batteries, such as backup during blackouts (with the right setup) and hedging against energy price increases and tariff changes when making a decision.