A New Path to Market for Flow Batteries: Rent an Electrolyte
Date: Feb 21, 2019
The newfangled arrangement lowers the upfront price of vanadium flow batteries, potentially making them more competitive with lithium.
When you’re competing with mass-produced lithium-ion batteries, every bit of cost reduction counts.
The dominant energy storage technology benefits from massive economies of scale. Flow batteries, a major class of alternative storage technologies, lack that scale, and some require vanadium, a material whose price has shot up in the last three years.
A new business model innovation could lower the price for vanadium flow batteries, nudging them closer to competitiveness with lithium: rentable electrolytes.
Flow battery acolytes have murmured about this for some time now, but it finally happened in the field. Flow company Avalon Battery lowered the upfront price tag of a recent deal by renting rather than buying its key ingredient.
The newfangled arrangement lowers the upfront price of vanadium flow batteries, potentially making them more competitive with lithium.
When you’re competing with mass-produced lithium-ion batteries, every bit of cost reduction counts.
The dominant energy storage technology benefits from massive economies of scale. Flow batteries, a major class of alternative storage technologies, lack that scale, and some require vanadium, a material whose price has shot up in the last three years.
A new business model innovation could lower the price for vanadium flow batteries, nudging them closer to competitiveness with lithium: rentable electrolytes.
Flow battery acolytes have murmured about this for some time now, but it finally happened in the field. Flow company Avalon Battery lowered the upfront price tag of a recent deal by renting rather than buying its key ingredient.
Commercial customer Sandbar Solar in Santa Cruz bought the flow system from Avalon as part of an off-grid microgrid installation. Meanwhile, it rented the vanadium from a not-yet-identified supplier under a 10-year rental contract with an option to extend.
A 10-year vanadium rental arrangement eliminates about one-third of the upfront capital expense of a flow battery purchase, said Matt Harper, president and chief product officer at Avalon Battery.
That expense doesn’t disappear: The annual rental payments will ultimately gobble up around 70 percent of those savings. The key is that it turns a large upfront charge into a smaller one.
