For those interested in the evolving battery storage market and missed the July Gigaom article on Aquion Energy’s manufacturing facility, it’s worth a read. Aquion uses aqueous hybrid ion tecnology to maximize energy density while keeping costs down.

Importantly, we got a peak into the costs of Aquion’s batteries:

Aquion is now selling its first battery stack product, the S-10, for $850 per stack (2 kWh each). Seven or eight battery units make up a stack. Twelve stacks make up a module, which runs for around $11,000. At those prices out of the gate, Aquion is selling its batteries for below $500 per kWh — on par with lead acid batteries, but they last longer without degrading and are guaranteed for at least 3,000 cycles. If the batteries are charged and discharged, say, once a day, they should last for more than eight years.

Those prices are just the beginning. Aquion’s goal is to drop its prices below $350 per kWh by the end of 2015 and to make them progressively cheaper after that, getting the cost under $200 per kWh by 2020.

Under $500 per kWh is competitive. In my conversations with Aquion, they also noted that they’re guaranteeing less than 20 percent capacity fade over 3000 life cycles. Capacity fade is critical in any new technology because it speaks to how the battery will degrade over time.

As important is life cycles. 3000 is certainly competitive, particularly for off grid applications. Though in terms of the utility market the 7,000 life cycle range is very attractive because its roughly 20 year lifespan matches that of solar power, making it sensible to pair the that battery storage with a solar farm. (For a full analysis, see my research note, “How renewable energy deployment is spurring the grid battery storage market.”) Aquion also has a solid handle on thermal runaway risks, which are a consideration in any new battery technology and which have been associated with lithium ion batteries.

Aquion is out early, commercializing and shipping batteries while much of its competition is still in the R&D phase. I expect a lot of battery storage startups to hit the market with commercialized products in 2015 and 2016. Will the market be there? It will come incrementally as everyone from utilities to microgrids do the math on pairing renewables with battery storage and figure out that grid parity is closer than they thought. And if prices for storage continue to move lower, I’ll remain optimistic about battery storage.