“The Rise of Lithium-ion Batteries: A Decade of Global Deployment and Price Trends”

“Price declines in lithium-ion battery technology have enabled its widespread deployment in the power sector, driving global capacity deployments to new heights. Understanding the relationship between price trends and deployment patterns is crucial for predicting future trends and shaping policy decisions.”

The lithium-ion battery pack price data is sourced from BloombergNEF’s Energy Storage Outlook 2021 report. The global lithium-ion energy storage capacity data is also sourced from the same report.

Lithium-ion batteries have seen significant price declines in recent years, making them an increasingly attractive option for energy storage applications. At the same time, global capacity deployments of lithium-ion batteries have also been steadily increasing. In this blog article, we will examine the trends in lithium-ion battery prices and global capacity deployments over the past decade.
From 2010 to 2018, average lithium-ion battery pack prices declined from $1,160/kWh to $176/kWh, a reduction of over 80%. This sharp decline is due to technological innovation and expanded manufacturing capacity, with manufacturing capacity expected to continue to grow to serve growing demand from the transportation and power sectors. By 2025, global annual manufacturing capacity of lithium-ion batteries is expected to reach over 1,000 gigawatt hours (GWh), up from 119 GWh in 2017, an increase of over 740%.
As lithium-ion battery prices have declined, global capacity deployments of lithium-ion batteries have increased steadily. In 2011, the global lithium-ion energy storage capacity was only 0.7 GWh. By 2020, it had increased to 63 GWh, a nearly 90-fold increase in just a decade. This increase in capacity deployments can be attributed to a variety of factors, including decreasing battery costs, supportive government policies, and an increase in renewable energy installations that require energy storage systems.
The above graph highlights the annual average global lithium-ion battery pack price declines over the last ten years, as well as the global lithium-ion energy storage capacity deployments during the same period

Lithium-ion battery pack prices have steadily declined over the past decade, with a significant drop observed in the last four years. Additionally, the global lithium-ion energy storage capacity has consistently increased each year, with a nearly 50% increase observed between 2019 and 2020 alone.
In conclusion, the trends in lithium-ion battery prices and global capacity deployments over the past decade clearly demonstrate that lithium-ion batteries are becoming increasingly competitive as an energy storage option. As manufacturing capacity continues to grow and prices continue to decline, we can expect to see even more significant increases in global capacity deployments of lithium-ion batteries in the coming years.

The falling price of lithium-ion batteries is expected to have a significant impact on the Indian PV plus storage market. As the cost of batteries continues to decline, it is becoming increasingly cost-effective for homeowners, businesses, and utilities to invest in energy storage solutions to complement their solar PV systems.

With the Indian government’s ambitious target of 175 GW of renewable energy capacity by 2022, there is a growing need for reliable and affordable energy storage solutions to support the integration of renewable energy into the grid. As the price of lithium-ion batteries continues to fall, it is becoming more economically viable to install PV plus storage systems, which can help to stabilize the grid and ensure a steady supply of clean energy.

Moreover, the decreasing cost of batteries is expected to drive innovation in the PV plus storage market, leading to the development of new and more efficient energy storage technologies. This could open up new opportunities for manufacturers and suppliers of battery storage systems in India, creating new jobs and driving economic growth.

However, there are still some challenges that need to be addressed in the Indian market, such as regulatory barriers and the lack of a clear policy framework for energy storage systems. Additionally, the cost of PV plus storage systems remains relatively high compared to traditional fossil fuel-based energy sources. Therefore, continued government support and incentives will be crucial to accelerate the adoption of PV plus storage systems in India.

Overall, the falling price of lithium-ion batteries is expected to have a positive impact on the Indian PV plus storage market, providing new opportunities for businesses, homeowners, and utilities to invest in clean, reliable, and affordable energy storage solutions.