Many people only think about that initial cost when investing. But this is a terrible investment strategy. A better way to spend your money is to think about other significant costs that come with the purchase.
This is why the Total Cost of Ownership (TCO) of lithium battery is important. Imagine that you need a battery for your vehicle or office. You will make a more responsible choice if you know the TCO of lithium batteries.
So, what is the TCO of lithium batteries? This article will help you factor in all the hidden costs of battery investment.
Why Is the TCO of Lithium Batteries Important?
The Total Cost of Ownership (TCO) can help you make better capital expenditures. Buying a lithium battery means you will pay for the upfront and maintenance costs.
In some purchases, this maintenance cost can surpass the initial cost. So, it is reckless to ignore the maintenance and operational costs when buying a battery.
In the rest of the article, we will explain the TCO of lithium batteries so you can make better financial investments.
What Is the TCO of Lithium Batteries?
The Total Cost of Ownership of Lithium batteries is the addition of the following costs:
- Purchasing or initial cost
- Installation cost
- Operational/maintenance cost
- Cost of disposal or recycling
So, the cost of purchase is just one of the many costs that make up the TCO. But how do these costs affect what you really pay for a battery? We’ll see.
Initial Cost Considerations
Lithium batteries cost more than other battery variants like AGM, gel, or lead-acid. For example, you can get a 12V 200Ah lead-acid battery for around $300. A similar-rated LiFePO4 (Lithium Iron Phosphate) battery can cost up to $500. That’s almost twice the price of a lead-acid battery. However, you can get a discount when you buy a GoldenMate battery.
More affordable lithium-ion (Li-ion) batteries will only hold so much energy and may have a short life. So, lithium batteries have a higher upfront or initial cost. This is because they deliver more value in terms of energy density, lightweight, and small size.
The Installation Cost
The purchase cost is not all the initial cost. You will still have to pay a technician to install the battery. You can save money if you are familiar with battery installations. You can set up a Li-ion battery without stress. Meanwhile, lead-acid ones require more expertise.
In addition, you will need to install a typical lead-acid battery in a conducive space with proper ventilation, and special floor. Also, it’s good to have standby showers or wash stations to water the battery when necessary.
Li-ion batteries do not need these installation steps. Li-ion battery users do not have to follow costly installation or maintenance processes. Many battery owners just set up their batteries in a cool and dry place and then go from there. It doesn't involve so much.
So, while lithium (Li-ion) batteries cost more, the cost of setup is minimal. In contrast, lead-acid batteries are cheaper but cost extra money to install.
Operating Costs
The cost of operation is only a fraction of the TCO. The cost of operation can build up and become the highest cost, especially if you use the battery daily. Energy-efficient batteries that have a long cycle life will cost less. So we will discuss these two factors.
Energy Efficiency and Cycle Life
Li-ion batteries are very energy efficient. So, only a little energy is wasted as heat. When it comes to energy, lead-acid batteries are more wasteful. So, it's cheaper to charge Li-ion batteries. The extra cost of charging lead-acid cells can accumulate over many years, leading to a higher TCO.
Cycle life is the number of charges and discharges a battery can withstand before it becomes bad. Think of it as the lifespan of your battery. Our durable batteries can manage 4000+ cycles. That is over four times the capacity of lead-acid batteries (500-1000). Li-ion batteries last up to 10 years with typical usage, while lead-acid batteries can only manage 3 to 5 years before needing a replacement. Regular battery replacement will increase your TCO.
Maintenance and Service Expenses
Maintenance is another cost that adds to the TCO. One lead reason Li-ion batteries are popular is because they require minimal maintenance. And you don't have to pay to maintain them. In contrast, lead-acid batteries require you to clean, refill water, and ensure acid neutralization. So you may suffer occasional downtime due to ongoing maintenance. This will further cost precious time and money.
End-of-Life Cost of Lithium Battery
People seldom factor the disposal or recycling expenses, but it’s part of the TCO. It’s pretty difficult to dispose or recycle lead-acid batteries. The presence of harmful substances like lead and acid make them difficult to dispose or recycle.
You can dispose of a LiFePO4 battery or recycle it easily. This convenience is in no small part due to their popularity and improved safety. The result? Li-ion batteries cost less to recycle and have a minimal negative impact upon disposal.
Factors Influencing TCO in Lithium Batteries
You must have noticed that the Total Cost of Ownership differs for various battery types. This is down to at least three reasons:
- Battery chemistry technology
- Usage pattern and application demands
- The Integration with renewable energy like solar systems
We will now discuss how these factors can reduce or increase the TCO of your lithium battery.
Battery Chemistry and Technology
As far as lithium battery technology is concerned, Lithium Nickel Manganese Cobalt Oxide (NMC) and Lithium Nickel Cobalt Aluminum Oxide (NCA) are the favorites. They can store a lot of energy and enjoy a decent circle life. LiFePO4 technology is not as energy-dense as NMC battery types. However, it is pretty safe, with a long cycle life. These benefits make them a common sight in households.
Benefits such as high energy density, long cycle, life, and overall safety will reduce the ownership cost on you.
Battery Usage Patterns and Application
The batteries you use for high-drain applications such as electric vehicles will end up costing more than one meant for low-drain use. After all, heavy usage will require you charge the battery more often. This will raise your electricity bill.
Similarly, you can attract unexpected costs if you charge, store, or a battery in extreme temperatures. Often, battery makers will recommend the best temperature for a battery. Going beyond or below this value can compromise your battery’s health. Soon, you will need to replace the damaged battery.
LiFePO4 and Lithium Titanate (LTO) will remain stable in high or low temperatures. So, they're a good bet if you must operate in cold or hot weather.
Integration with Renewable Energy Systems
If you hope to recharge the battery with a renewable source such as solar or wind, then you must choose the correct battery type. For example, you want a battery that can store enough charge due to the seasonal nature of renewable energy. Also, it helps if the battery has a long cycle life. Thus, a high energy density and long cycle life can lower costs. This is why the LiFePO4 battery is often paired with solar systems.
How Lithium Battery Is Used in the Real-World
We will briefly discuss two scenarios where you should consider your battery’s cost of ownership:
- As an energy storage system for homes
- To power electric vehicles
Energy Storage System for Homes
If you are looking for a cost-effective battery for a residential space, then you’re better with LiFePO4. Since you will charge and use the battery every day, you want something with a long cycle life or life span. Some lithium battery brands only boast of ~2000 cycles. But our GoldenMate batteries can manage up to 4000 cycles, meaning they can last up to 10 years.
Expect that these batteries will carry all your household appliances, including air conditioning units and refrigerators. Also, they are pretty stable, so you don’t have to worry about safety.
Electric Vehicles (EVs)
Currently, many governments are incentivizing ownership of electric vehicles. So, you don’t only save on gas. You also save initial costs when buying the EV. And to top it, you help contribute to a cleaner atmosphere. There are several cost incentives for owning a LiFePO4 battery today.
Strategies for Getting the Most Value in Lithium Batteries
If you hope to get better value for your money, here are three tips to help you do so with your lithium battery:
Investment in High-Quality Battery Systems
Avoid buying low-quality batteries. You may save on upfront costs but spend more to maintain and eventually replace the battery. Meanwhile, a long-term and reliable battery looks more expensive but will save you money as time go by.
Maintain the Battery Properly
“Prevention is better than cure” may be cliche, but it is true for lithium batteries. For long-lasting batteries, avoid overcharging the battery. Also, it helps to use them in the correct environment and temperature.
Recycle Bad or Faulty Batteries
Some recycling plants will pay for your dead or faulty battery. So, you can make money by taking old batteries to a recycling or environmental center. This way, you get all the value for your purchase. Also, you avoid harming the environment with toxic waste.
Future Trends and Outlook as per Lithium Battery TCO
You can expect near-future innovations to further drive down the cost of energy. Future batteries will pack even more energy and charge in less time. Also, considering the emphasis on green energy, you can expect more renewable energy systems. Thus, the demand for batteries will only go up.
Wrapping Up
So, it may cost less to get any battery type. However, you will end up paying more to finance the maintenance and operation in the long term. All of these associated costs are part of the total cost of ownership.
In contrast, a quality battery from GoldenMate battery will save you cost down the road. Get free shipping and a 5 years warranty when you order with us. Our service team is eager to help you with your battery-related inquiries. Feel free to contact us today.
