Battery Degradation Calculator
Battery capacity fades every year a system operates, and that fade is a core input to any bankable BESS project model. This calculator applies a simplified linear degradation model — the same approach most warranties use for planning purposes — to convert initial rated capacity, an annual degradation rate, a projection period, and an end-of-life threshold into remaining capacity at a fixed mid-point (year 5) and at the end of the projection, cumulative capacity lost, and the year the system crosses its end-of-life threshold. Pair it with our LCOS Calculator — degradation is a direct driver of levelized storage cost — and our Capacity Market Revenue Calculator to see how shrinking usable capacity erodes capacity payments over the delivery year.
The original rated energy capacity of the battery system in MWh.
Typical range for utility-scale LFP systems is 2-3%/year (roughly 20-30% cumulative loss over 10 years).
Number of years to project remaining capacity forward.
Most warranties and project models define end-of-life as 80% of original rated capacity — the industry-standard '80% rule.'
87.5% of original rated capacity — fixed mid-point reference (year 5)
75.0% of original rated capacity — 100% − (degradation rate × 10 years)
25.0% of original rated capacity lost by year 10
(100% − 80% EOL threshold) ÷ 2.5%/year
Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.
This uses a simplified linear degradation model, the same approach most warranties use for planning purposes. Real-world degradation is often front-loaded (faster in year 1-2, then flattening) rather than perfectly linear — treat these figures as reasonable estimates, not precise forecasts.
How we calculate this →Degradation isn't a footnote — it's a revenue line. At a typical 2.5%/year degradation rate, a 400 MWh system crosses the industry-standard 80% end-of-life threshold at year 8 — well before many 15-20 year project lifetimes. A financial model built on flat, undegraded capacity will overstate revenue in every single year past the first, and that gap compounds. Pricing degradation into revenue projections from day one isn't conservative, it's just accurate.
How battery degradation is calculated
This calculator uses a simplified linear degradation model — the same approach most battery warranties use for planning purposes — where capacity fades by a fixed percentage of original rated capacity each year. Four quantities tie the calculation together.
Remaining Capacity at Year N (%) = 100% − (annual degradation rate (%) × N). A 2.5%/year rate means the system retains 87.5% of original capacity at year 5 and 75% at year 10. Remaining Capacity at Year N (MWh) = initial rated capacity (MWh) × (remaining % ÷ 100). At 400 MWh initial capacity, that is 350 MWh at year 5 and 300 MWh at year 10.
Cumulative Capacity Lost (MWh) at the final projection year = initial rated capacity − remaining capacity at the final projection year; Cumulative Capacity Lost (%) = 100% − remaining capacity % at the final projection year. At the defaults, 100 MWh and 25% lost by year 10.
Years to Reach End-of-Life Threshold = (100% − end-of-life capacity threshold (%)) ÷ annual degradation rate (%). With an 80% threshold and 2.5%/year degradation, the system reaches end-of-life at year 8. The year-5 figure is always computed as a fixed mid-point reference regardless of the projection period length.
Real-world degradation is rarely perfectly linear — it is often front-loaded, with faster capacity loss in the first year or two as cell chemistry settles, then a flatter, more gradual decline. The linear model is used here because it matches how most warranties frame capacity guarantees and because it is transparent and easy to audit. Treat the output as a reasonable planning estimate, not a precise forecast. Actual degradation depends heavily on temperature control, depth of discharge, C-rate, cycling frequency, and average state of charge. Data sources: typical utility-scale LFP degradation rates (2-3%/year for well-designed, moderately used systems); field data from a Southern Italy PV-integrated lithium-ion BESS (95.88% state of health after 3 years, 356 equivalent full cycles); industry-standard 80% end-of-life capacity threshold (warranties and project planning).