Levelized cost of storage (LCOS)

Levelized cost of storage (LCOS) is the average cost per unit of electricity a battery system discharges over its lifetime, expressed in $/MWh, calculated from upfront capital cost, financing, round-trip efficiency losses, degradation and augmentation spending, spread across every cycle the system performs. It is the storage equivalent of levelized cost of energy (LCOE) for generation, and it lets a 2-hour and a 6-hour battery, or lithium-ion and flow chemistries, be compared on equal footing regardless of upfront price. Lazard's 2026 benchmark put utility-scale 4-hour lithium-ion LCOS at roughly $210-292/MWh, up about 27% from 2020 on higher capital costs and import tariffs, though other estimates range from under $100/MWh to well above $250/MWh depending on chemistry and cycling frequency. LCOS differs from the simple $/kWh sticker price this site's BESS Price Index tracks: a cheaper pack can still produce a higher LCOS if it degrades faster or cycles less often.