How does a battery storage system degrade over time?

The capacity of lithium-ion cells declines for two mutually independent reasons. Cyclic degradation depends on the number of charge–discharge cycles, while calendar degradation depends purely on the passage of time — the latter happens even when the storage system is idle. For industrial LFP systems, the typical combined value is a capacity loss of 2–3% per year, which means roughly 80% retention after ten years. Three factors accelerate it the most: high cell temperature (which is why active cooling is needed), regular operation in a wide SOC window, and a high C-rate. This has a direct financial consequence: in its tenth year the storage system moves less energy than in its first, so the savings are not linear over the term. Manufacturers usually address this with augmentation (installing additional cells later) or with a guaranteed capacity curve — it is worth looking for this point specifically in the offer, because there is a significant difference between the two. Augmentation means a later cost, whereas a guaranteed curve shifts the risk to the supplier.