<p dir="ltr">The need for reducing reliance on fossil fuels to meet ever-increasing energy demands and minimizing global climate change due to greenhouse gas emissions has led to an increase in investments in Variable Energy Resources (VREs), such as wind and solar. But due to the unreliable nature of VREs, an energy storage system must be coupled with it which drives up the investment cost.</p><p dir="ltr">Lithium-ion batteries are compact, modular, and have high cyclic efficiency, making them an ideal choice for energy storage systems. However, they are susceptible to capacity loss over the years, limiting the total life of the batteries to 15-18 years only, after which they must be safely discarded or recycled. Hence, designing a Battery Energy Storage System (BESS) should consider all aspects, such as battery life, investment cost, energy efficiency, etc.</p><p dir="ltr">Most of the available studies on cost and lifetime of BESS either consider a steady degradation rate over years, or do not account for it at all, they take constant charge/discharge cycles, and sometimes do not consider ambient temperature too. This may result in an error in estimation of the cost of energy storage. The location where the BESS is supposed to be installed can also impact its life, given that each location has its own power consumption trend and temperature profile. In this work, we attempt to simulate a BESS by considering the ambient temperature, degradation rate and energy usage. This will help in getting an insight of a more realistic estimate of levelized cost of storage and for estimating the thermal energy needed to keep them within a certain temperature range, so that they can last longer.</p>