Capacity Design and Economics of Operation

Every concept covered in the five preceding articles converges on two practical questions customers always ask. How many kWh of battery does a system actually need, and how long does it take to recoup the investment under Vietnam’s electricity tariffs? This article provides the sizing formula and an economic framework to answer both questions on a sound basis.

For: system design engineers, sales staff building proposals for customers, newcomers who want to understand the logic behind a recommended capacity figure.

Quick summary

Required battery capacity is calculated from daily energy consumption multiplied by days of autonomy, then divided by the product of the allowable depth of discharge and system round-trip efficiency. This division always produces a number larger than the energy you want to use, because it must compensate for the reserve held back and for conversion losses.

Inverter power and battery capacity must be matched through C-rate. An inverter that is more powerful than the battery’s discharge capability forces the battery to operate beyond its rated continuous output.

On the economics side, a battery earns its return primarily through time-of-use price arbitrage and through self-consuming solar electricity instead of exporting it cheaply to the grid. In Vietnam, the tiered residential tariff for households and the time-of-use tariff for industrial consumers are the two main mechanisms that generate those savings.

Calculating required battery capacity

The most common mistake is to take the desired daily energy use directly as the battery capacity. A real battery must be larger, for two reasons covered in earlier articles. Because the battery cannot be discharged to zero, only a portion of its capacity is usable, and energy passing through the battery is subject to round-trip losses. The formula combines both factors as follows.

Required battery capacity equals daily energy consumption multiplied by days of autonomy, divided by the product of depth of discharge and system round-trip efficiency. Take a household example: a customer wants to run 10 kWh each evening from the battery, with one day of autonomy, a DOD of 90%, and a system round-trip efficiency of 90%. Required capacity is 10 divided by (0.9 × 0.9), which comes to approximately 12.3 kWh. A 16 kWh battery pack such as the SF-16KWH-L1 covers this comfortably and also allows shallower daily cycling, which improves longevity. Note the 90% DOD used in this example is the battery’s maximum technical limit; following the 70-80% daily-cycling recommendation in 03-03, sizing at 80% DOD gives 10 ÷ (0.8 × 0.9) ≈ 13.9 kWh, and this margin is precisely why a 16 kWh pack is chosen.

Days of autonomy depend on the design objective. A hybrid grid-tied system typically needs only one day because the solar array recharges the battery every daytime period. A system in an area with frequent extended outages may need one to two days. A fully off-grid system requires more, but that is a separate design problem.

Matching the battery to the inverter

Battery and inverter cannot be selected independently. The inverter’s continuous power output divided by the battery capacity is the C-rate the battery must sustain. A 10 kW inverter paired with a 16 kWh battery forces the battery to operate at around 0.6C, and the battery must support that continuous discharge rate.

The safety rule is that the inverter’s maximum power output must not exceed the battery’s continuous discharge capability. For the SF-16KWH-L1, a discharge current of 200 A at 51.2 V corresponds to approximately 10 kW, so pairing it with a 10 kW inverter is the sensible upper limit. If higher power is needed, multiple battery packs are connected in parallel to share the current, which lowers the C-rate on each individual pack and extends overall service life. This is the practical reason many commercial systems use multiple packs rather than a single large one.

How a battery generates economic value

A battery pack does not generate electricity; it shifts electricity in time. The economic value comes from whether that shift is profitable, through two mechanisms.

The first mechanism is time-of-use price arbitrage. When off-peak electricity is cheaper than on-peak electricity, the battery charges during cheap hours and discharges during expensive hours, capturing the price differential minus round-trip losses. The second mechanism is solar self-consumption. When the export rate for surplus solar is lower than the retail import rate, every kWh self-consumed from the battery instead of purchased from the grid represents a saving, and every kWh stored rather than exported cheaply adds the same value.

In both mechanisms, the system round-trip efficiency discussed in article 03-04 is a direct deduction from profit. For every 10 kWh put into storage, only approximately 8.5–9.2 kWh is recovered for use, so the price differential must be large enough for the savings to outweigh these losses. This is the first test any battery proposal must pass.

Vietnam electricity tariff context

Two tariff structures shape the battery economics problem in Vietnam, and they differ between residential and industrial customers.

Households pay under a tiered block tariff: the more electricity consumed, the higher the unit rate for the upper blocks. From 2025, the residential tariff was reduced from six tiers to five under Decision 14/2025/QĐ-TTg, with the lowest tier at approximately 2,000 VND/kWh and the highest at approximately 4,000 VND/kWh excluding VAT. The average retail price under Decision 1279 of 2025 is approximately 2,204 VND/kWh excluding VAT. For high-consumption households falling into the upper tiers, battery storage reduces the amount of electricity purchased at the more expensive rates, and that is where the saving is most visible.

Industrial and commercial customers pay under a three-component time-of-use tariff comprising off-peak, normal, and on-peak periods, with the time bands defined by day of the week. The on-peak rate for industrial customers is substantially higher than the off-peak rate, so the price differential is large and battery storage is particularly attractive when charged during off-peak hours and discharged during on-peak hours.

Rooftop solar regulations relevant to battery storage

The current regulatory framework also affects the battery economics calculation. Under Decree 58 of 2025 on the self-generation and self-consumption mechanism, grid-tied rooftop solar systems may sell surplus electricity to the grid but are capped at 20% of generation output (not installed capacity; including electricity sourced from the battery), at a price based on the previous year’s average market price.

This export cap further increases the value of battery storage. When surplus generation exceeds the permitted export volume or is purchased at a low price, storing that surplus in the battery for evening self-consumption is a far better use of the energy than allowing it to go to waste. In other words, the tighter the export restrictions, the more compelling the investment case for self-consumption storage.

Sales takeaway

When advising on capacity, do not let customers take their desired daily energy consumption directly as the battery size they need to buy. Explain briefly that the real battery must be larger to compensate for the held-back reserve and for round-trip losses, and that moderate oversizing means better longevity. A figure backed by a formula is always more persuasive than a rough estimate.

When advising on economics, anchor the battery to the customer’s own tariff. For high-consumption households in the upper tiers, the value proposition is avoiding the most expensive tier rates. For industrial customers, the proposition is the price differential between on-peak and off-peak. And for every customer with solar, the proposition is storing surplus for self-consumption instead of exporting it cheaply under the regulatory cap. These three narratives are far more concrete than a generic promise that installing a battery will save money.