Solar battery chemistry: LFP or NMC?

What are the main battery chemistries?

Solar batteries rely on different chemical compositions, with Lithium Iron Phosphate (LFP) and Nickel Manganese Cobalt (NMC) standing out as the most widely used. Both fall under the umbrella of lithium-ion batteries, but their composition and characteristics differ significantly.

LFP batteries use lithium iron phosphate (LiFePO₃) as the cathode material, while NMC batteries employ a combination of nickel, manganese, and cobalt (LiNixMnyCozO2) in their cathodes. The key difference lies in their atomic structure: LFP features a so-called “olivine structure”, which is quite stable, while NMC uses a “layered structure” that allows for higher energy density but can be less stable.

The olivine structure in LFP batteries refers to a specific arrangement of atoms that resembles the mineral olivine. This structure creates strong bonds between the iron, phosphorus, and oxygen atoms, making it inherently stable. In layman’s terms, you can think of it as a robust, interlocking 3D puzzle that’s difficult to break apart. This stability contributes to the battery’s safety and longevity, as it’s less prone to chemical changes during charging and discharging cycles.

In contrast, NMC batteries have a layered structure where the nickel, manganese, and cobalt atoms are arranged in distinct layers. This design allows lithium ions to move more freely between layers during charging and discharging. In simple terms, imagine a stack of neatly arranged sheets of paper with gaps between them—this “layered” arrangement enables faster movement of ions, which helps deliver higher energy density and better performance. However, this structure is less stable than LFP’s olivine framework, which is why NMC batteries require more advanced safety management systems.

Currently, NMC batteries dominate the global market with a share of about 60%, while LFP batteries account for approximately 30%. However, the market is shifting rapidly. According to McKinsey projections, LFP’s share could rise to about 44% by the end of 2025.

While LFP and NMC dominate the current market, emerging technologies like sodium-ion batteries are also on the horizon. These batteries use abundant and inexpensive sodium instead of lithium, potentially offering a more sustainable and cost-effective solution. However, sodium-ion technology is still in its early stages and is more of a 2030 prospect.

LFP vs NMC batteries

We can see each chemistry's advantages and disadvantages along a handful of dimensions for comparing them.

Lifetime

LFP batteries typically have a longer lifespan compared to NMC batteries. They can withstand more charge-discharge cycles before significant degradation occurs. LFP batteries often boast cycle lives of 3,000-8,000 cycles, while NMC batteries usually range from 1,000-2,500 cycles.

Cost

LFP batteries are generally cheaper than NMC batteries. The raw materials used in LFP batteries, particularly iron and phosphate, are more abundant and less expensive than the nickel and cobalt used in NMC batteries. LFP batteries are usually 20% cheaper per kWh than NMC products. This cost difference becomes even more significant when considering the longer lifespan of LFP batteries.

Safety

LFP batteries have a clear advantage in terms of safety. Their chemical structure is inherently more stable, making them less prone to thermal runaway and combustion. Even under extreme conditions such as punctures or high temperatures, LFP batteries are less likely to catch fire or explode. NMC batteries, while generally safe, require more advanced safety management systems.

Sustainability

LFP batteries are often considered more environmentally friendly. They don’t contain cobalt, a material associated with ethical and environmental concerns in mining practices. Additionally, the materials used in LFP batteries are more readily recyclable.

Performance

This is where NMC batteries shine. They offer higher energy density, meaning they can store more energy in a given volume or weight. NMC batteries also tend to perform better in extreme temperatures and can deliver higher power outputs.

Which chemistries do popular batteries have?

Most popular home battery systems currently on the market feature LFP chemistry. This includes well-known brands like InstaGen, Fox ESS, and Alpha ESS.

The notable exception is Tesla. The Powerwall 2, Tesla’s previous generation home battery, used NMC cells. However, with the introduction of Powerwall 3, Tesla is rumoured to have made a significant shift to LFP chemistry, although this hasn’t been officially confirmed.

It’s worth noting that Tesla’s move towards LFP technology extends beyond just their home energy storage products. The company has been increasingly adopting LFP batteries across their product line, including in their electric vehicles. This shift is part of Tesla’s broader strategy to reduce costs, improve safety, and decrease reliance on scarce materials like cobalt. The company has already transitioned its standard-range Model 3 and Model Y vehicles to LFP batteries in many markets, and there are indications that this trend will continue across more of their product range.

Should I go for an LFP or NMC battery?

Given the current market offerings and the characteristics of each chemistry, LFP batteries are increasingly becoming the natural choice for most home energy storage applications. They offer compelling advantages in terms of safety, longevity, and sustainability while still providing sufficient performance for home use. However, the choice between LFP and NMC batteries depends on your specific needs and priorities.

At Capture Energy, we are happy to help you navigate these options and choose among leading battery products that best suit your requirements. Our team provides personalised advice based on your energy consumption patterns, budget, and long-term goals. To find the best solution for your home, complete the short survey below for a tailored recommendation: