How much battery do you actually buy? Day one vs. year 20.
Every grid-scale contract is quoted as usable AC at the meter; you buy DC cells. Trace the full loss chain — HV transformer down to the cell — and even with zero degradation you already overbuild ~1.11×. But nobody sizes for day one. Size so the fleet still delivers at year 20, and at 70% state of health the number is ~1.58×. The gap between those two scenarios is almost entirely degradation.
The loss stack, meter to cell
Start at what the offtake contract actually pays for — 1.0×, usable AC at the point of interconnection, metered on the HV side. Every stage between that meter and the DC cell is a small efficiency you have to buy back: the HV transformer, AC cabling, the site’s own auxiliary load, the MV transformer, the PCS, DC cabling, the usable SoC window, the fade a cell picks up between the factory and commissioning, and the cell’s own one-way discharge efficiency. Divide through all of them and the beginning-of-life DC nameplate lands at 1.11× the contracted energy — before a single day of ageing.
overbuild = 1 ÷ (Π stage efficiencies) · year‑20 = BOL ÷ SOH
No single stage is dramatic — the largest single loss is the cell’s own one-way efficiency at three points, and the biggest conversion stage, the PCS, costs under two. Stacked, the whole chain from meter to cell costs about 11%. That is scenario one: what you’d install if the plant only had to work on its first day.
Two scenarios: day one vs. year 20
But a battery is not sold on its first day. The offtake guarantee has to hold at year 20, after the cells have faded. So you oversize on day one by the reciprocal of the end-of-life state of health — size the fleet so that when it has decayed to 70% of BOL, it still clears the contract. That single step moves the overbuild from 1.11× to 1.58× — scenario two. For a 400 MWh contract that is 443 MWh of cells on day one versus 633 MWh to still clear the guarantee at year 20.
The degradation term adds 0.47× of overbuild — about 4.4× everything the entire electrical loss chain, from HV transformer to cell, adds (0.11×). Every transformer, cable, and conversion stage you could optimise is a rounding error next to the number the warranty is written to.
The EOL definition sets scenario two
Scenario one is fixed physics — transformers and cables don’t negotiate. Scenario two is a contract term. The state of health you size to is the single biggest lever on procurement, and it swings widely across real warranties.
Write the guarantee to 80% SOH and the year-20 overbuild is 1.38×; write it to 65% and it is 1.70×. That single clause moves more nameplate than the entire meter-to-cell loss chain. It is also why augmentation exists — install less at BOL and top the fleet up mid-life — trading a smaller day-one buy for future procurement and integration risk. Either way you are paying for the same fade; the only question is when.
Method
The overbuild is 1 ÷ (product of every stage efficiency), then
÷ EOL SOH for the year-20 scenario. Because contracted energy and duration cancel
out of that ratio, the multiplier is the same for a 2-hour or an 8-hour battery — it is
set by the loss chain and the warranty, not by project size. Only one-way
discharge efficiency enters, not the round-trip number: the contract pays for energy
delivered to the meter, so charge-side loss doesn’t change how much nameplate you install.
Stage assumptions: HV transformer 99.5%, AC cabling 99.7%, auxiliary load 2%, MV transformer 99%,
PCS 98.5%, DC cabling 99.7%, usable SoC window 99%, production-to-BOL fade 99.5%, cell one-way
efficiency 97%, and 70% SOH at year 20 (swept 60–80%). Run your own numbers in the free sizing calculator, or read the full walk-through in the sizing guide.
“BESS Nameplate Overbuild: Day One vs Year 20” (2026), BESS.courses — https://bess.courses/research/bess-overbuild/