By Jeff Zwijack

This article was originally published in pv magazine - October 2024 Edition.

The choice of battery project partners and suppliers – including for battery cells – can make or break a battery energy storage system (BESS). Price is not everything, and a supplier’s technology and long-term support must align with buyer needs and risk appetite.

From supply-chain reliability to warranty coverage, numerous variables affect the choice of a BESS-project supplier. A strategic decision will prioritize long-term performance and partnership.

Battery supply chains have rapidly evolved since 2014 and developers can choose from big, established global suppliers down to local businesses.

US projects

US-sourced lithium ferro-phosphate (LFP) battery cells can be 20% more expensive than Chinese products, thanks to raw material, equipment and labor costs, but legislation is closing the gap.

“Section 301” trade tariffs on Chinese cells – under the 1974 Trade Act – are set to rise from 7.5% to 25% in 2026 and the US Inflation Reduction Act incentivizes developers to use US-sourced content and manufacturers to make domestic cells. US-made cells also avoid the potential of seizure at the border, as has happened with solar panels under the Uyghur Forced Labor Prevention Act.

Those tariffs and incentives bridge the price gap but a lack of US-based battery cell manufacturing capacity may sustain a premium on US products.

With such factors at play, it’s worth considering how to select a cell supplier.

Request for proposal  

Proposals should be as specific as possible and should characterize battery depth of discharge, power levels (C-rate), rest periods, and resting state of charge requirements, as well as the number of cycles and energy throughput needed.

Project developers must ensure that the battery technology being tendered fits its required usage. If buyers don’t take these factors into consideration during the supplier selection process, they may run into warranty issues.

A supplier will look at vast amounts of data to see whether a system has been operated according to warranty. Overheating due to a failure in the thermal management system, or a failure of the software to curtail power when temperatures rise, could void a cell’s warranty. If a battery system is frequently overcharged, that too could create warranty issues.

Suppliers will spend more time completing a request for proposal (RFP) if they are assured it will lead to a contract award. It is crucial to provide details demonstrating that a buyer has the three key elements of a successful project – site control, an interconnection agreement, and a power purchase agreement or other offtake contract.

Grid interconnection queues have rapidly grown in the United States in recent years and can add months, or even years to a project. Suppliers are much more likely to bid on a project that has an approved grid connection.

Rather than leaving an RFP open-ended, include a clear time frame for when bids are due and when suppliers should expect a response. It should specify when products should be delivered and when payment will be provided. Including such details can help to ensure suppliers take their bid seriously.

Quality assurance

Supply agreements should also include provisions covering quality assurance systems and processes to ensure products work as intended.

Analysis of BESS manufacturing issues and defects conducted by Clean Energy Associates reveals that about 30% of faults originate during battery cell manufacture. System-level defects accounted for almost 50% of our findings.

Compared to the cell-manufacturing process, BESS integration has fewer quality control procedures.

We have encountered numerous problems with thermal management systems. In liquid-cooled systems, coolant can leak due to deformed flange plates, defective valves, and loose pipe connections.

There could also be issues with the various sensors providing data to battery management and thermal management systems.

Malfunctions can be encountered in thermometers, smoke alarms, gas sensors, and electrical fault detection systems.

Even if data collection systems are functioning properly, do they communicate faults? There may be issues with audible or visual alarms due to miswiring, preventing operators from immediately identifying and mitigating problems.

It is important to include the right to put an auditor into a supplier’s manufacturing facility as part of any supply agreement. A third party should perform a factory audit where engineers go through a detailed checklist of issues, assess risks, and recommend process changes prior to manufacturing.

A supplier should permit buyers to perform inline production monitoring so that engineers can monitor production in real time to ensure quality, to spot issues, and to suggest corrections. As each batch of cells is completed, buyers should use pre-shipment inspections (for simple components) or factory acceptance testing (for more complex systems) to identify faulty components before they are shipped. The pre-shipment inspection should inspect and test a random sample of the finished product to ensure they meet quality standards. It is important to communicate these processes to the supplier and ensure they are in the supply agreement.

A buyer needs to trust that their supplier is providing them with the right equipment, that it will work as intended, and that the supplier will help fix or replace faulty components if the need arises.

Think of it as choosing a long-term partner. Buyers want to be on the same page in terms of what they require, how they plan to use it, and what support they will need to ensure projects can operate successfully throughout their lifespan.

Jeff Zwijack is CEA’s senior manager for energy storage, helping buyers to choose the right suppliers and ensure product quality and safety. Zwijack previously started the application engineering and sales team at IHI Terrasun Solutions, where he helped to propose and design more than 11 GWh of energy storage system opportunities. He has helped to close more than 1 GWh of projects.