CATL announced commercial sodium-ion battery production starting Q2 2025.
Cost: 30-40% cheaper than lithium-ion per kWh.
Energy density: 70-75% of lithium-ion.
For industrial solar + storage, sodium-ion just became the better choice.
Here's why—and when it isn't.
The chemistry difference
Lithium-ion (LFP - Lithium Iron Phosphate):
- Energy density: 150-160 Wh/kg
- Cycle life: 4,000-6,000 cycles
- Operating temperature: -20°C to 60°C
- Thermal runaway risk: Low (LFP safer than NMC)
- Cost: ₹90-120 per kWh (2025 pricing)
Sodium-ion (CATL first-gen):
- Energy density: 120-140 Wh/kg (70-85% of LFP)
- Cycle life: 4,000-5,000 cycles
- Operating temperature: -40°C to 70°C (better than lithium)
- Thermal runaway risk: Near zero (sodium doesn't form dendrites)
- Cost: ₹60-80 per kWh (30-40% cheaper)
The key differences:
- Sodium-ion takes 30% more space/weight for same energy
- Sodium-ion works in extreme cold (lithium fails below -10°C)
- Sodium-ion can't catch fire (no thermal runaway)
- Sodium is 1,000× more abundant than lithium
Cost comparison for industrial installations
100 MWh battery system (for 50MW solar plant):
Lithium-ion (LFP):
- Battery cells: ₹90-100 crore
- BMS + inverters: ₹15-20 crore
- Installation + integration: ₹10-12 crore
- Total: ₹115-132 crore
- ₹1.15-1.32 crore per MWh
Sodium-ion:
- Battery cells: ₹60-70 crore
- BMS + inverters: ₹15-20 crore (same)
- Installation + integration: ₹12-15 crore (larger footprint)
- Total: ₹87-105 crore
- ₹87 lakh-1.05 crore per MWh
Savings: ₹25-30 crore for 100 MWh (25-30% lower)
For 50MW solar + 100 MWh storage, this is the difference between:
- Lithium: ₹300-320 crore total project cost
- Sodium: ₹275-295 crore total project cost
Energy density tradeoff
Why lower energy density matters (and when it doesn't):
For EVs (it matters):
- Vehicle weight = efficiency = range
- Every kg of battery = reduced payload
- Space is constrained (car floor pan)
- Energy density is critical
For stationary storage (it doesn't matter much):
- Weight is irrelevant (concrete foundation)
- Space is usually available (industrial land)
- Efficiency = charge/discharge, not movement
- Energy density is secondary to cost
Physical footprint comparison:
100 MWh installation:
- Lithium-ion: 600-700 m² floor space, 2.5-3m height
- Sodium-ion: 800-900 m² floor space, 2.5-3m height
Land cost impact:
- Additional land: 200-250 m² (0.05 acres)
- Land cost in industrial areas: ₹40-60 lakh per acre
- Extra land cost: ₹2-3 lakh
You pay ₹2-3 lakh more land to save ₹25-30 crore on batteries.
This is why stationary storage is going sodium.
Cycle life and degradation
Lithium-ion degradation:
- Year 1-5: 2-3% per year
- Year 5-10: 3-4% per year
- Year 10-15: 4-5% per year
- After 15 years: 60-70% capacity remaining
Sodium-ion degradation (projected, limited field data):
- Year 1-5: 2-3% per year (similar to lithium)
- Year 5-10: 3-4% per year
- Year 10-15: 3-4% per year (slower degradation)
- After 15 years: 65-75% capacity remaining
Warranty comparison:
- Lithium-ion: 10 years / 4,000 cycles (70% capacity guarantee)
- Sodium-ion: 10 years / 4,000 cycles (70% capacity guarantee)
Practical cycling (daily charge/discharge):
- 4,000 cycles = 11 years of daily use
- Most industrial solar + storage: 250-300 cycles/year (not daily)
- Battery lifespan: 15-20 years for both chemistries
Safety and fire risk
Lithium-ion fire incidents:
- Thermal runaway temperature: 150-200°C (for LFP)
- Fire suppression: Expensive (immersion cooling, inert gas)
- Insurance premium: Higher due to fire risk
- Regulatory requirements: Fire-rated enclosures, spacing
Sodium-ion safety:
- No thermal runaway (sodium-ion doesn't form metallic dendrites)
- Fire suppression: Standard systems work
- Insurance premium: Lower (no catastrophic fire risk)
- Regulatory: Same as industrial electrical equipment
Real cost impact:
100 MWh battery installation:
- Lithium-ion fire suppression: ₹3-5 crore
- Sodium-ion fire suppression: ₹80 lakh-1.2 crore
- Savings: ₹2-4 crore
Add this to capital cost savings: Total ₹27-34 crore cheaper with sodium-ion.
Temperature performance
Odisha summer (40-45°C ambient):
Lithium-ion performance:
- Optimal: 25-35°C
- At 45°C: Degradation accelerates 2×
- Cooling required: Active HVAC (costs ₹2-3 crore for 100 MWh)
- Operating cost: ₹30-40 lakh/year for cooling
Sodium-ion performance:
- Optimal: 25-45°C (wider range)
- At 45°C: Normal operation
- Cooling required: Passive (ambient air)
- Operating cost: ₹5-8 lakh/year
For Odisha/summer-heavy climates: Sodium-ion saves ₹25-35 lakh per year in cooling.
NPV over 15 years: ₹2.5-3.5 crore additional savings.
When lithium is still better
Use lithium-ion when:
Space is extremely constrained:
- Rooftop installations
- Urban sites with high land cost
- Retrofits into existing buildings
High power density needed:
- Frequency regulation (millisecond response)
- UPS applications (rapid discharge)
- Grid stabilization (high C-rate discharge)
Extreme cold climate:
- Actually, no—sodium-ion works better in cold (see below)
Proven track record required:
- Risk-averse customers
- Lenders require 10+ years field data
- Insurance requires proven technology
Lithium-ion advantages:
- 10+ years field data (sodium-ion has 1-2 years)
- Higher energy density (matters for space-constrained sites)
- Established supply chain (easier procurement)
When sodium-ion is better
Use sodium-ion when:
Large stationary storage:
- Solar + storage (grid-connected or captive)
- Wind + storage
- Grid-scale energy arbitrage
Land is available:
- Industrial facilities
- Solar farms
- Greenfield projects
Cost is primary driver:
- Payback period matters
- Large installations (50+ MWh)
- Budget-constrained projects
Hot climate:
- Odisha, Gujarat, Rajasthan, Maharashtra summers
- Reduced cooling costs
- Better degradation profile at high temps
Safety is critical:
- Near population centers
- Insurance requirements
- Regulatory restrictions on lithium
Sodium-ion advantages:
- 30-40% lower cost (biggest factor)
- No thermal runaway risk
- Better high-temperature performance
- Abundant materials (no supply chain risk)
Supply chain and availability
Lithium-ion (2025):
- Suppliers: CATL, BYD, LG, Samsung, Panasonic (established)
- Lead time: 4-6 months
- Supply risk: Lithium mining concentration (Australia, Chile)
- Price volatility: High (lithium prices fluctuate 50-100%/year)
Sodium-ion (2025):
- Suppliers: CATL (primary), BYD (starting), HiNa Battery (China)
- Lead time: 6-9 months (limited production)
- Supply risk: Low (sodium is everywhere—salt water)
- Price volatility: Low (commodity material)
By 2026-2027:
- Multiple sodium-ion suppliers expected
- Lead times drop to 3-4 months
- Prices continue declining (economies of scale)
Real project comparison
50MW solar + 100 MWh storage in Odisha:
Lithium-ion option:
- Solar: ₹160-175 crore (50MW at ₹3.2-3.5 crore/MW)
- Battery (lithium): ₹115-132 crore (100 MWh)
- Fire suppression: ₹3-5 crore
- Cooling systems: ₹2-3 crore
- Integration: ₹10-12 crore
- Total: ₹290-327 crore
Operating costs (annual):
- O&M: ₹8-10 crore
- Cooling: ₹30-40 lakh
- Insurance: ₹2.5-3 crore (fire risk premium)
- Total: ₹11-14 crore/year
Sodium-ion option:
- Solar: ₹160-175 crore (same)
- Battery (sodium): ₹87-105 crore (100 MWh)
- Fire suppression: ₹80 lakh-1.2 crore
- Cooling systems: ₹50-80 lakh (passive)
- Integration: ₹10-12 crore
- Total: ₹259-294 crore
Operating costs (annual):
- O&M: ₹8-10 crore
- Cooling: ₹5-8 lakh
- Insurance: ₹1.5-2 crore (lower risk)
- Total: ₹10-12.5 crore/year
Savings:
- Capex: ₹30-35 crore (11% lower)
- Annual opex: ₹1-2 crore/year
- 15-year TCO: ₹45-60 crore lower
Financing and bankability
Lender perspective (2025):
Lithium-ion:
- Bankable: Yes (10+ years data)
- Debt:equity ratio: 70:30
- Interest rates: 9-10%
- Proven technology discount
Sodium-ion:
- Bankable: Uncertain (new technology)
- Debt:equity ratio: 60:40 (conservative)
- Interest rates: 10-11% (risk premium)
- Technology risk premium
This changes the economics:
₹100 crore battery investment:
- Lithium (70% debt at 9%): Equity requirement ₹30 crore
- Sodium (60% debt at 10%): Equity requirement ₹40 crore
You need ₹10 crore more equity for sodium-ion. But the battery itself costs ₹25-30 crore less.
Net: Still ₹15-20 crore cheaper to go sodium.
Our recommendation by use case
Use Sodium-Ion for:
- Grid-connected solar + storage (any size > 50 MWh)
- Captive solar for manufacturing (load shifting, demand charge reduction)
- Solar microgrids (industrial parks, special economic zones)
- Hot climate installations (Odisha, Gujarat, Rajasthan)
Use Lithium-Ion for:
- Datacenter UPS (high power density, proven track record)
- Rooftop solar + storage (space constrained)
- Urban installations (expensive land)
- Projects requiring bank financing (bankability requirements)
Either works (choose on price) for:
- 50-100 MWh installations (economics similar)
- Moderate climates (temperature advantage minimal)
- Proven site with low fire risk (safety advantage minimal)
What we're deploying
All new 50+ MWh projects: Sodium-ion by default (starting Q3 2025)
Reasons:
- 30-40% cost savings = better customer economics
- Safety profile = lower insurance, simpler permitting
- Temperature performance = lower operating costs in India
- Supply chain = price stability (no lithium volatility)
For smaller projects (< 50 MWh): Still using lithium-ion until sodium supply scales
Our timeline:
- Q1-Q2 2025: Lithium-ion for all projects (sodium not available)
- Q3-Q4 2025: Sodium-ion for 50+ MWh projects
- 2026 onwards: Sodium-ion becomes default for all stationary storage
The bottom line
Sodium-ion batteries are 30-40% cheaper than lithium. For industrial solar + storage, that's ₹25-35 crore savings on a 100 MWh system.
The energy density penalty doesn't matter for stationary storage. The safety advantage saves another ₹2-4 crore. The temperature performance saves ₹25-35 lakh per year in operating costs.
Total savings over 15 years: ₹45-60 crore for a 100 MWh system.
If you're planning solar + storage for 2026-2027 installation: Specify sodium-ion batteries. The technology will be proven, supply will be available, and you'll save 30-40% on the largest single cost component.
We're switching all large projects to sodium-ion in Q3 2025.