For energy storage batteries, purchasing a warranty beyond 10 years does not make much sense, as a significant portion of the battery would likely need to be replaced after that period. Insurance can also be obtained. Operating and maintaining batteries is complex due to the reliance on software to optimize performance. The rates of deterioration of the battery depend on how the battery is used.
In the energy storage sector, there are two main types of warranties: a product warranty, which is a guarantee against defects, and a performance warranty. In this context, we do not focus on the product warranty as much.
If a battery storage system's managing company goes bankrupt, it would be challenging to replace the control software that ensures the system operates efficiently and provides savings for the customer. With battery storage, you can have a system with 100% of year-one capacity, but if the software does not dispatch it correctly, it will not produce savings.
Insurers consider balance-sheet support and look for a developer to make a guarantee that is similar, if not stronger. In the context of energy storage, there are usually two types of warranties. First, there is a product warranty, which is a guarantee against defects.
LG Chem offers an energy throughput warranty, meaning it warrants that the battery will deliver a certain amount of energy over a 10-year life. The number of times a day the battery is cycled affects the battery's lifespan, making energy throughput a crucial factor.
Under Southern California Edison’s GS3 time-of-use rate, energy storage is being quoted in every solar deal as the energy charge during peak periods, which are from 4 to 9 p.m. or 5 to 8 p.m., is as high as 40¢ a kilowatt hour. With the change in time-of-use rates in California, developers and solar installers are now quoting energy storage.