  While the use of energy storage combined with grid-scale photovoltaic power
plants continues to grow, given current lithium-ion battery prices, there
remains uncertainty about the profitability of these solar-plus-storage
projects. At the same time, the rapid proliferation of electric vehicles is
creating a fleet of millions of lithium-ion batteries that will be deemed
unsuitable for the transportation industry once they reach 80 percent of their
original capacity. The repurposing and deployment of these batteries as
stationary energy storage provides an opportunity to reduce the cost of
solar-plus-storage systems, if the economics can be proven. We present a
techno-economic model of a solar-plus-second-life energy storage project in
California, including a data-based model of lithium nickel manganese cobalt
oxide battery degradation, to predict its capacity fade over time, and compare
it to a project that uses a new lithium-ion battery. By setting certain control
policy limits, to minimize cycle aging, we show that a system with SOC limits
in a 65 to 15 percent range, extends the project life to over 16 years,
assuming a battery reaches its end-of-life at 60 percent of its original
capacity. Under these conditions, a second-life project is more economically
favorable than a project that uses a new battery and 85 to 20 percent SOC
limits, for second-life battery costs that are less than 80 percent of the new
battery. The same system reaches break-even and profitability for second-life
battery costs that are less than 60 percent of the new battery. Our model shows
that using current benchmarked data for the capital and O&M costs of
solar-plus-storage systems, and a semi-empirical data-based degradation model,
it is possible for EV manufacturers to sell second-life batteries for less than
60 percent of their original price to developers of profitable
solar-plus-storage projects.
