Techno-Economic and Environmental Viability of Second-Life EV Batteries in Commercial Buildings: An Analysis Using Real-World Data

The rapid growth of electric vehicle markets is producing large volumes of retired lithium-ion batteries retaining 70–80% of their original capacity, suitable for stationary energy storage. This study assesses the techno-economic and environmental viability of second-life battery energy storage systems (SLBESS) in a California commercial building, using one year of operational data. SLBESS performance is compared with equivalent new battery systems under identical dispatch strategies, building load profiles, and time-of-use tariff structures. A dispatch-aware framework integrates multi-year battery simulations, degradation modeling, electricity cost analysis, and life cycle assessment based on marginal grid emissions. The economic analysis quantifies the net present value (NPV), internal rate of return (IRR), and operational levelized cost of storage (LCOSop). Results show that SLBESS achieve 49.2% higher NPV, 41.9% higher IRR, and 13.8% lower LCOSop than new batteries, despite their lower round-trip efficiency. SLBESS reduce embodied emissions by 41% and achieve 8% lower carbon intensity than new batteries. Sensitivity analysis identifies that economic outcomes are driven primarily by financial parameters (incentives, acquisition cost) rather than technical factors (degradation, initial health), providing a clear rationale for policies that reduce upfront costs. Environmentally, grid emission factors are the dominant driver. Battery degradation rate and initial state of health have minimal impact, suggesting that technical concerns may be overstated. These findings provide actionable insights for deploying cost-effective, low-carbon storage in commercial buildings.