Lithium-Ion Battery Price Decline Mirrors Solar PV Trends: The Case for Second-Life Batteries​

Lithium-ion battery costs are falling rapidly, mimicking the price trajectory of solar photovoltaics. 

With EVs accounting for 80% of 2023 demand, these batteries will enter the stationary storage markets 5-8 years later. Technological advances, economies of scale, and chemistry shifts drive this decline, paralleling PV's cost-reduction curve.

As rooftop PV surpasses nuclear and fossil fuels, its intermittency demands energy storage. Li-ion batteries now underpin large-scale BESS deployments, complementing overbuilt PV and pumped hydro to reduce curtailment. The chart below shows aligned cost declines for silicon PV modules and Li-ion batteries since 2010.

Second-Life Batteries & the EU Battery Passport

Retired EV batteries with remaining capacity offer value in stationary storage. Key drivers include circular economy policies, cross-industry collaboration, and faster diagnostics—startups now test battery State-of-Health (SOH) in minutes vs. hours.

The EU Battery Passport, mandatory for EV/industrial batteries from 2027, tracks lifecycle data via QR codes. It includes composition, dismantling specs, SOH, and usage history to enable recycling, remanufacturing, and second-life applications.

Many prefer repurposing whole battery packs over disassembling modules due to high labor costs. A California project demonstrates this, using 900 retired EV batteries for a 53 MWh grid-scale storage system.

Market Challenges

While Asia/Europe have mature second-life ecosystems, the US lags due to fragmented markets. A key barrier: first-life owners expect 50%+ of original value, but second-life buyers can only pay 10-20%. This, plus rapid technology obsolescence, sends viable batteries to recycling prematurely—exacerbated by warranty gaps and testing costs.

Second-life batteries bridge recycling and disposal, but require policies penalizing premature recycling. The EU's Battery Passport, extended producer responsibility (EPR), and data-sharing regulations can drive circularity. Incentives must prioritize repurposing over early recycling to maximize value.