How it works
Energy is lost at every step between the grid and the cells and back. The transformer and inverter lose a little each way. The cells lose energy as heat through their internal resistance, more at high current. Cooling, controls and lighting draw auxiliary power, which some contracts count against efficiency and others meter separately. Measured at the grid connection, these losses add up to the round-trip figure.
RTE is measured by charging the battery from a set SoC, discharging it back to the same SoC, and dividing energy out by energy in, both in MWh at the meter. It changes with conditions. Higher power means more heat and lower efficiency. Hot weather raises the cooling load. Long idle periods lose a little to self-discharge and auxiliaries. Efficiency also slips as the cells age. Suppliers usually guarantee RTE at a stated measurement point and age, and the test method matters as much as the number.
Why it matters
RTE sets the price spread a battery needs before arbitrage earns anything, since every MWh sold costs more than one MWh bought. It also shapes warranties, capacity tests and the energy a project must buy to meet a contracted discharge. A few points of difference compound over thousands of cycles. Two suppliers' figures can only be compared when they are measured at the same point and include the same auxiliary loads.
A worked example
A battery with 86% RTE must deliver 100 MWh each evening. It needs 100 ÷ 0.86 = 116.3 MWh of charging, so 16.3 MWh is lost. If charging energy costs $40/MWh, the loss costs 16.3 × 40 = $652 a day. Over 350 cycles a year that is $228,200. The evening price must also exceed 40 ÷ 0.86 = $46.5/MWh before each discharged MWh covers the cost of charging it.
Illustrative figures.
Across markets
In India, storage tenders usually have the buyer supply the charging energy and set a minimum RTE, for example 85%, with the developer paying for losses beyond it. That makes RTE a contractual guarantee with a direct penalty. In the US and Europe, most batteries trade on their own account, so a lower RTE shows up as a thinner arbitrage margin, and the guarantee sits in the supply contract between owner and manufacturer.