"There are legitimate safety concerns," said Frankel. "There have been notable product failures, from cell phones to laptops and even Tesla's [cars]."
Other technologies, such as chemical flow batteries, have an advantage over Li-ion batteries when it comes to scalability, Frankel said.
Flow batteries get their name because they use liquid chemicals (electrolytes) that are separated by a membrane. The reaction between the two chemicals frees up electrons, creating electricity.
Flow batteries and Li-ion batteries work well with intermittent energy sources such as solar panels and wind turbines because of their ability to be idle for long periods without losing a charge. But flow batteries scale more easily because all that's needed to grow capacity is more liquid; the hardware remains the same.
So flow batteries have the potential to be less expensive than Li-ion batteries. They also have a longer duration, according to Frankel. At full discharge, Li-ion last only four hours. In order to get twice that length of charge, another complete battery unit must be added, Frankel said.
For a flow battery system, the cost is currently $755/kWh for a 4-hour battery, according to Franek. That cost is expected to fall to $516/kWh by 2024. For large scale Li-ion systems costs will fall from $626/kWh in this year to $498/kWh in 2025.
So on a per-kilowatt basis, Vanadium flow batteries will almost always be more expensive. However, on a per kilowatt hour basis (i.e., how long they can run depending on how large the electrolyte fluid tanks are) they can be cheaper. The larger the tanks, the more power you can get.
"This is what is attractive about flow batteries, that power and energy scale independently," Frankel said.
Additionally, cheap Li-ion battery cells made in the Gigafactory are only part of the puzzle. Unlike electric vehicles, in stationary batteries for homes and businesses, there is more of a relative cost contribution coming from power electronics, software, and installation.
"Without more vertical integration -- and perhaps even some acquisitions and Gigafactory-like efforts dedicated to inverters -- Tesla is limiting its growth potential here," Frankel said. Inverters are required on any solar power or battery system to convert direct current to alternating current.
Bill Watkins, CEO of Imergy Power Systems, said the problem with lithium-ion batteries like what Tesla is planning to produce is a relatively low number of charge/discharge cycles over the battery's life.
"The battery gradually begins to wear out... and lose its capacity," Watkins said. "For homeowners, this means replacing their battery more frequently -- and that adds up quickly."
Imergy Power Systems is another grid and residential energy storage provider. It makes vanadium-flow batteries from industrial waste, rather than digging for new vanadium, which is more costly. The U.S. currently has only one vanadium mine, which is located in Nevada.
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