Solar+Storage/Model & Assumptions

From Open Energy Information

Model & Assumptions

The REopt Model

The Renewable Energy Optimization Model (REopt) provides cost-optimal technology solutions at a single site, or across a portfolio of sites.

REopt is a mixed integer linear program that outputs optimal technology sizing and hourly dispatch strategies, along with financial data.

REopt can identify optimal system sizes, given other parameters, or can output financial data for set system sizes. Multiple on-site technologies, including existing diesel generators, can be considered in the optimization.

The REopt model is currently run by NREL analysts, in-house. A web-based version of the tool is currently in development, and expected to be released as a beta-version in September 2017.

For more information about REopt, visit:

Technology Cost Assumptions

Optimization modeling was conducted for seven solar photovoltaic and battery storage price points, representing anticipated cost trajectories.

High Technology Cost Point represents conservative technology costs in the current market. Some stakeholders are reporting current costs closer to the Mid-Technology Cost Point.

Stretch Technology Cost Point represents estimated technology costs by 2037.

The solar technology cost trajectory is based on NREL’s Annual Technology Baseline. Battery storage costs are based on NREL discussions with a variety of battery suppliers and developers.

Cost Point PV System Installed Cost ($/w) PV O&M Cost ($/kW) Battery Storage System Installed Cost for Power Rating* ($/kW) Battery Storage System Installed Cost for Energy Rating ($/kWh) Battery Storage Replacement Cost ($/kW) Battery Storage Replacement Cost ($/kWh)
High Cost Point $1.37 $8 $1,332 $290 $441 $256
Mid Cost Point $1.11 $8 $1,062 $256 $407 $238
Low Cost Point $0.97 $8 $1,193 $151 $326 $106
Stretch Cost Point $0.90 $8 $787 $106 $276 $97

* Battery storage projects costs vary depending on the power to energy ratio (also referred to as "duration"). The REopt model requires storage project costs to be input as two separate numbers, one for the power rating and another for the energy rating. These two cost variables are considered together in determining the optimal battery system configuration and, hence, the final project cost.

Components included in the Cost Assumptions

Battery & Hardware Costs
Inverter - power conversion
Container or housing
Container extras (insulation/walls)
Electrical conduit (inside of container)
Communication device
Meter (revenue grade)
Fire detection
Fire suppression
AC main panel
DC disconnect
Isolation transformer
AUX power - lighting etc.
Engineering, Planning & Construction Costs
Control system/SCADA
Site preparation
Loading & drive from OEM site
Lifting & hoisting by crane on site
PE stamped calcs & drawings
OEM testing and commissioning
Electrical BOS outside of container (conduit, wiring, DC cable)
Electrical labor
Structural BOS (fencing)
EPC overhead & profit
Soft Costs
Developer cost (customer acquisition)

Policy & Financing Assumptions

Unless otherwise noted:
System life20 years.
Inflation Rate2.5%
Discount Rate10.2%
Net metering is not included. When included, system size is capped at 100% load.
30% Investment Tax Credit is included.
"Modified Accelerated Capital Depreciation (MACRS):5 year + bonus depreciation for solar and battery system components (if battery charged >25% from grid, 7 year depreciation).
No other state or federal incentives are included.

Hardware Assumptions

Inverter & Storage ReplacementIn Year 10
Total Round Trip Efficiency82.9%
Battery Throughput85%
Inverter Efficiency92%
Rectifier Efficiency90%
Minimum Charge20%
Initial State of Charge50%

Scenarios Modeled

More than 24,000 scenarios were modeled to identify cost-optimal solar and/or battery storage system configurations for 73 commercial electricity rates for the utilities with the largest number of customers in each climate zone.

Table of Scenarios Modeled


Joyce Mclaren (bio)
Senior Energy Analyst
National Renewable Energy Laboratory

Todd Olinsky-Paul
Project Director
Clean Energy Group