Millions of EV batteries could retire on solar farms

This article by Grist is published here as part of the global journalism collaboration Covering Climate Now.

On a 20-acre parcel outside the tiny Southern California town of New Cuyama, a 1.5-megawatt solar farm uses the sun’s rays to slowly charge nearly 600 batteries in nearby cabinets. At night, when energy demand rises, that electricity is sent to the grid to power homes with clean energy.

To make renewable energy from intermittent sources like solar and wind available when it is most needed, it’s becoming more common to use batteries to store the power as it’s generated and transmit it later. But one thing about the Cuyama facility, which began operations this week, is less common: The batteries sending energy to the grid once powered electric vehicles.

The SEPV Cuyama facility, located about two hours northeast of Santa Barbara, is the second hybrid storage facility opened by B2U Storage Solutions. Its first facility, just outside Los Angeles, uses 1,300 retired batteries from Honda Clarity and Nissan Leaf EVs to store 28 megawatt-hours of power, enough to power about 9,500 homes.

The facilities are meant to prove the feasibility of giving EV batteries a second life as stationary storage before they are recycled. Doing so could increase the sustainability of the technology’s supply chain and reduce the need to mine critical minerals, while providing a cheaper way of building out grid-scale storage.

“This is what’s needed at massive scale,” said Freeman Hall, CEO of the Los Angeles-based large-scale storage system company.

Electric vehicle batteries are typically replaced when they reach 70 to 80 percent of their capacity, largely because the range they provide at that point begins to dwindle. Almost all of the critical materials inside them, including lithium, nickel, and cobalt, are reusable. A growing domestic recycling industry, supported by billions of dollars in loans from the Energy Department and incentives in the Inflation Reduction Act, is being built to prepare for what will one day be tens of millions of retired EV battery packs.

Before they are disassembled, however, studies show that around three quarters of decommissioned packs are suitable for a second life as stationary storage. (Some packs may not have enough life left in them, are too damaged from a collision, or otherwise faulty.)

“We were seeing the first generation of EVs end their time on the road, and 70 percent or more of those batteries have very strong residual value,” said Hall. “That should be utilized before all those batteries are recycled, and we’re just deferring recycling by three, four, or five years.”

Extending the useful life of EV batteries mitigates the impact of manufacturing them, said Maria Chavez, energy analyst at the Union of Concerned Scientists.

“The whole point of trying to deploy electric vehicles is to reduce emissions and reduce the negative impacts of things like manufacturing and extractive processes on our environment and our communities,” Chavez told Grist. “By extending the life of a battery, we reduce the need for further exploitation of our natural resources, we reduce the demand for raw materials, and we generally encourage a more sustainable process.”

Just as batteries have become crucial to reducing emissions from transportation, they’re also needed to fully realize the benefits of clean energy. Without stationary storage, wind and solar power can only feed the grid when the wind is blowing or the sun is shining.

“Being able to store it and use it when it’s most needed is a really important way to meet our energy needs,” Chavez said.

The use of utility-scale battery storage is expected to skyrocket, from 1.5 gigawatts of capacity in 2020 to 30 gigawatts by 2025. EV packs could provide a stockpile for that buildout. Hall said there are already at least 3 gigawatt-hours of decommissioned EV packs sitting around in the United States that could be deployed, and that the volume of them being removed from cars is doubling every two years.

“We’re going from a trickle when we started four years ago to a flood of batteries that are coming,” he said.

B2U says its technology allows batteries to be repurposed in a nearly “plug and play fashion.” They do not need to be disassembled, and units from multiple manufacturers — B2U has tested batteries from Honda, Nissan, Tesla, GM, and Ford — can be used in one system.

The packs are stored in large cabinets and managed with proprietary software, which monitors their safety and discharges and charges each battery based on its capacity. The batteries charge during the day from both the solar panels and the grid. Then B2U sells that power to utilities at night, when demand and prices are much higher.

Hall said using second-life batteries earns the same financial return as new grid-scale batteries at half the initial cost, and that for now, repurposing the packs is more lucrative for automakers than sending them straight to recyclers. Until the recycling industry grows, it’s still quite expensive to recycle them. By selling or leasing retired packs to a grid storage company, said Hall, manufacturers can squeeze out more value out of them.

That could even help drive down the cost of electric vehicles, he added. “The actual cost of leasing a battery on wheels should go down if the full value of the battery is enhanced and reused,” he said. “Everybody wins when we do reuse in a smart fashion.”

B2U expects to add storage to a third solar facility near Palmdale next year. The facilities are meant to prove the idea works, after which B2U plans to sell its hardware and software to other storage-project developers.

At the moment, though, planned deployment of the technology is limited. B2U predicts only about 6 percent of decommissioned EV batteries in the U.S. will be used for grid-scale storage by 2027.

“People are skeptical, and they should be, because it’s hard to do reuse of batteries,” said Hall. “But we’ve got a robust data set that does prove reliability, performance, and profitability. We’re at a point where we really can scale this.”