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Lithium Ion Batteries Guide

tesla powerwall 2Lithium-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 connect thousands of AA sized Lithium-ion cells together and assemble them into a liquid-cooled battery pack wrapped in a strong metal enclosure, which in turn is wrapped in their hallmark fancy plastic shield.

But Tesla aren't the only company manufacturing lithium-ion solar batteries and there are some good Tesla Powerwall alternatives available. For example, LG have released their RESU battery, pictured, which offers similar performance. There are many more companies coming to market with Li-ion battery systems as we speak. This technology has become the most popular home energy storage technology in Australia.

This is mainly due to the fact that 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 LiFePO (Lithium Iron Phosphate)

NMC battery technology, with its high energy density, is well suited to electric vehicles, whereas LiFePO technology is better suited to residential storage applications.

The Tesla Powerwall 2, as well as the LG Chem RESU, uses NMC technology, and those companies will argue vigorously that NMC is the best bet for your home.

Brands such as Simpliphi and DCS use LiFePO 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.

You may ask why companies would use NMC technology for residential energy storage.

The short answer is – because their factories (like Tesla's Gigafactory) are already cranking out massive amounts of NMC lithium-ion batteries for electric vehicles, so they figure they may as well use them in a residential battery as well.

NMC is also, for now, cheaper to produce than LiFePO batteries. This may factor into why some companies favour NMC technology over LiFePO.

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 14kWh Tesla Powerwall 2 is expected to retail for around $9,600 AUD.

To do a rough price calculation, a 5kW solar system with a battery compatible inverter costs roughly $8,000. If you add the Tesla Powerwall 2 price of $9,600 AUD to this, you end up with a total cost of around $17,600.

I'll be the first to admit that $17,600+ 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. My recommendation is for people to wait 3-5 years for battery prices to drop further before they consider adding them to their homes.

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