June 13, 2019: If threats by the president Trump administration to raise US tariffs on Chinese imports of lithium ion batteries and inverters to 25% are eventually enforced, the installed price for a four-hour duration battery would increase by about 15%, an analyst at S&P Global Platts Analytics said on June 6.
“Lithium ion batteries accounts for 40% to 60% of the total installed cost of a standalone battery storage asset in the US,” said Felix Maire, clean energy and storage senior analyst at the analytics firm.
“The impact of the tariff would vary project by project, but we estimate a 25% tariff on both lithium ion batteries and inverters could increase the installed prices for a four-hour duration battery by about 15%.”
Robert Lighthizer (pictured), the US trade representative, announced on May 10 the US would increase the level of tariffs from 10% to 25% on $200 billion worth of Chinese imports under Section 301 of the Trade Act of 1974.
Those tariffs, however, have not been put in place and there is no date certain for them to be implemented.
The Trump administration used the proposed tariffs as a threat to bring pressure on the Chinese government to conclude talks on a broad-based trade agreement. By May 21, those talks had broken down and have not been resumed.
Two key items — lithium ion batteries for use in storage systems and static converters also used in storage systems — were on the May 13 list of items the USTA said it would raise tariffs on.
Yayoi Sekine, energy storage analyst at BloombergNEF, said in a recent ESA webinar that the 2019 estimated price of a stationary storage lithium ion battery was $185/kWh.
If imported from China with a 25% tariff applied, the battery itself would cost $235/kWh.
If tariffs on all the components of a 20MW/80MW energy storage system were included, the aggregated impact would be an 18% system cost increase to $338/KWh, she said.