Grid-Scale Storage Calculator

That raw multiplication only tells you the energy that needs to come OUT of the battery during discharge — round-trip efficiency accounts for the fact that some energy is lost converting power in during charging and again converting it back out during discharging. Dividing the required output by the efficiency percentage scales up the actual storage capacity you need to purchase so that, after those losses, you still deliver the full target output.

Demand charge savings comes from simply having enough power capacity available during your utility's peak demand window each month, regardless of how many times the battery cycles — it's essentially a standing capability payment. Energy arbitrage revenue, by contrast, is earned by actively cycling the battery daily, buying cheap off-peak electricity and selling it back during expensive peak hours, so the two revenue streams reward different behaviors and can be captured by the same physical asset simultaneously.

The calculator multiplies the battery's usable energy by the price spread and by 365 days, which implicitly assumes the battery completes one full charge-discharge cycle every single day of the year to capture that spread. A real installation that cycles less often — due to maintenance, lower market volatility, or operational constraints — would earn proportionally less arbitrage revenue than this full-utilization estimate shows.

It's a simple total-cost-divided-by-annual-revenue calculation that doesn't include financing costs, battery capacity degradation over years of use, changes in demand charge rates or arbitrage spreads over time, or the operations and maintenance costs of running the system. Treat it as a quick first-pass economic screen to compare scenarios against each other, not a bankable financial projection.