Battery Price Break-Even (Sezibwa)

[!info] Conservative, bank-facing basis (revised after independent review) Turnkey installed capex and real day-to-day weather. Independent of the other docs because it rests on a battery-price assumption rather than a fixed quote.

The question

The optimal-allocation case found that at today's battery price, adding battery capacity lowers the return: the money is better spent on solar. But Aaron's point stands: the long-term microgrid model wants more storage, so the real question is a price one. How cheap does battery have to get before expanding it pays? This document answers that, and it is deliberately independent because it rests on a price assumption rather than a fixed quote.

It also takes Aaron's framing as the base case: net metering is not the play (the best value for onsite generation is selling it onsite to the consumer,onsite, not feeding it back to a grid that already has a generation surplus). So this analysis uses no feed-in and asks only what storage is worth for shifting onsite solar into the evening.

Method

The same 20-year model (real load, real weather, battery aging to 50 percent by year 20, 0.5turnkey percent per year panel fade,solar, 15 percent discount, solar about 990,000 UGX per kWp),discount) but with the battery price swept as a variable instead of fixed.. At each price the model re-finds the best allocation of solar and battery and compares its 20-year NPV against the best allocation that adds no battery.

Today's price for reference: theprice: SR-SE10B is 5,568,000 UGX for 8.9 kWh usable, which is about 626,000 UGX per kWh.

Result

The linebreak-even is theanchor-dependent 20-year(it NPVdepends gainedhow bymuch addingsolar battery,you asalready have, because a functionbigger ofarray spills more surplus that a battery price.could Abovesoak the break-even it is zero or negative (spend on solar instead). Below it, battery starts to add value, and the gain grows as the price falls.up):

the 82 percent

BatterySolar anchor	Break-even battery price	Best allocation	NPV gain vs notoday's extra battery626k/kWh
626,0004 per kWh (today)kWp	5about kWp,264,000 no extra batteryUGX/kWh	0about 42 percent (batteryneeds does~58 notpercent pay)cheaper)
about5 575,000 per kWhkWp (break-even)	6 kWp, +1 unitoptimum)	about 0410,000 UGX/kWh	about 66 percent (marginal)needs ~34 percent cheaper)
200,000 per kWh	6 kWp, +1 unitkWp	about +3.3M
100,512,000 per UGX/kWh	6 kWp, +2 units	about +4.7M
near zeropercent (recycledneeds /~18 free)	6 kWp, +3 units	about +6.9Mcheaper)

Findings

1. Break-even is about 575,000 UGX per kWh, only about 8 percent below today's price. So battery is right at

   At the edge:5 akWp modestoptimum, price drop makes the first added unit marginally worthwhile.

2. Marginal is not a business case. For battery expansion to deliver material value (a few million in NPV), the price needs tomust fall to roughlyabout 200,410,000 UGXUGX/kWh per kWh, (about a third ofcheaper today'sthan price,today) or lower.
3. At a cheap or free source,before the storage-heavyfirst microgridextra modelunit works.pays. NearBelow zero cost,that, the optimumgain becomes 6 kWp plus three battery units, adding about 6.9M UGX of NPV. This is where a battery-rich standalone system finally beats a solar-only one.
4. This validates the recycled-battery strategy. Sourcing second-life cells (for example from cars, which discard packs while still holding 60 to 80 percent capacity) is exactly the path to the price range where expansion pays. The number to aim for is roughly 200,000 UGX per kWh or below; the closer to free, the stronger the case.

grows.

Investment metrics (15 percent cost of capital)

Allocation	Upfront	Payback	ROI (20-yr cumulative)	IRR	20-yrNPV NPVat 15%
6 kWp + 1 unit at 200,000 per kWh	7.7M9.3M	1.92.5 yr	863636 percent	5240 percent	16.7M13.2M
6 kWp + 3 units recycled / free	5.9M7.6M	1.48 yr	1,291938 percent	7154 percent	20.2M17.6M

Note

Findings

1. Break-even at the tension:5 kWp optimum is about 410,000 UGX/kWh, roughly a third below today. Higher if you have already scaled solar to 6 kWp, lower at 4 kWp.
2. For material value you want battery well below break-even, toward 200,000 perUGX/kWh kWh,or addingless battery(6 raiseskWp + 1 unit gives about 13.2M NPV (moreat totalthat wealth)price).
but lowers IRR (a lower average return per shilling), because you deploy more capital at
3. At a still-goodcheap but lower marginal return. Withor free orsource the storage-heavy model wins outright: recycled cells bothgive rise.
   6

   MetricskWp atplus athree 15units, percentabout cost17.6M of capital (the assumed financing rate). Payback is the time to recover the upfront cost; ROI is the total lifetime return on that cost; IRR is the project's effective annual return,NPV and a lender54 fundspercent aIRR, projectbetter whenthan itssolar-only.

IRR
4. This comfortably exceedsvalidates the loanrecycled-battery rate;strategy. NPVSecond-life iscells (discarded by cars while still holding 60 to 80 percent) are the wealthpath created expressed in today's money. Solar stays strongly positive across any realistic rate (10 to 24 percent) becauseinto the paybackprice isrange sowhere short; the discount rate mainly affects the battery-expansion case.
   pays. Aim for roughly 200,000 UGX/kWh or below.

Caveats

• Second-life cells are already partly aged, so the "fade to 50 percent over 20 years"fade-to-50-percent-over-20-years assumption is optimistic for them; a shorter effective life would raiseraises the price target (makemakes it stricter). The direction holds: cheap battery unlocks the case, but recycled cells should be de-rated for their remaining life.

• This prices energy value only.only; Batterybattery also buys backup and autonomy,backup, which has its own value not counted here; that argues for some battery regardless of the energy-only break-even.

here.

Related

Builds on Optimal Solar and Battery Allocation. Companion cases: Battery Arbitrage (alone) and Solar Plus Battery.