Do Solar Batteries Pay Off? An Honest Look at the Numbers

Sometimes, but less often than sales pitches suggest. A home battery pays for itself on bill savings mainly when your utility credits exported solar at a low rate, when evening electricity is expensive, or when a program pays you to let the grid use your battery. Under full retail net metering, a battery saves almost nothing on your bill. Backup power during outages is worth something real, but that value is yours to judge, not a number on a spreadsheet.

What a battery costs in 2026

As of October 2026:

• EnergySage marketplace data: about $1,130 per kWh of storage installed (H1 2026 report).
• A typical 13.5 kWh battery, the median size in LBNL’s 2025 data: roughly $12,000 to $16,500 installed. We use $15,000 as a default.
• Federal tax credit for owned batteries: $0. The 25D credit ended for installs completed after December 31, 2025. See our tax credit guide.

Batteries are popular anyway. LBNL found 37% of residential solar systems installed in 2025 included storage, up from 25% in 2024, with the highest rates in Hawaii and California.

The three ways a battery creates value

1. Bill savings from self-consumption and time shifting

A battery stores solar power you’d otherwise export and lets you use it later, typically in the evening. It can also charge from the grid at cheap hours and discharge at expensive ones, if your rate plan rewards that.

This only saves money if a stored kWh is worth more later than it would have earned as an export. You also lose about 10% to 11% in the round trip (Tesla’s Powerwall 3 spec is about 89% round-trip efficiency).

2. Payments from virtual power plants and incentives

Some utilities and states pay battery owners to let the grid draw on their stored energy during peak demand. This is often called a virtual power plant (VPP). Examples from our research:

• ConnectedSolutions (Eversource and National Grid in Massachusetts, Rhode Island, Connecticut and New Hampshire): about $275 per kW of average summer event performance, with the rate locked for 5 years. A 5 kW average contribution earns about $1,375 a year. Municipal light plants are excluded. Confirm current rates on Mass Save or your utility’s site.
• Connecticut Energy Storage Solutions: an upfront incentive per kWh (roughly $200 to $250 per kWh baseline, higher for underserved and low-income customers, up to a $16,000 residential cap) plus performance payments.
• California SGIP: rebates of roughly $1,100 per kWh for income-qualified and other eligible households through the Equity budget, with a waitlist. General-market budgets are reported closed. See the CPUC SGIP page.
• Hawaiian Electric BYOD: upfront payments plus $5 per kW per month for daily evening dispatch, under the original program terms.
• Duke Energy PowerPair (North Carolina): up to $9,000 for solar plus battery, with a capacity cap. Status was unclear in our research, so check whether funds remain.

3. Backup power

When the grid goes down, a standard grid-tied solar system shuts off for safety. A battery with the right transfer equipment keeps selected circuits, or sometimes the whole home, running. This is the most common reason people buy batteries, and it’s legitimate. It just doesn’t show up as a bill saving. Compare it fairly with alternatives in generator vs battery backup.

When batteries pay on bill savings

Net billing with low export credits. In California, exports under the Net Billing Tariff average roughly 4 to 5 cents per kWh, while evening time-of-use rates can top 40 cents. Storing midday solar for evening use is worth a lot per kWh. See California net billing.

Time-varying export rates. Hawaii’s Smart DER tariff pays about 13.5 cents for midday exports on Oahu but 32.9 cents during the 5 to 9 p.m. peak. A battery that discharges in the evening more than doubles the value of each stored kWh.

Big gaps between peak and off-peak prices. Covered in detail in time-of-use rates and solar.

Strong VPP or rebate programs. ConnectedSolutions, Connecticut’s program and SGIP can cover a large share of the cost.

When batteries don’t pay on bill savings

Full retail net metering. If every exported kWh earns the full retail price and credits roll forward, the grid is already acting as a free, lossless battery. Adding a real battery gains nothing on your bill and loses about 11% of the energy you cycle through it. In states such as New Jersey, Pennsylvania, Colorado or Florida’s investor-owned utilities, a battery is a backup purchase, not a savings purchase, unless a separate program pays you.

Low, flat electricity rates. If there’s no expensive evening period, there’s nothing to shift into.

When it pushes you to oversize solar. Some pitches add panels to “charge the battery.” If those panels make power you’d otherwise export cheaply, that’s fine; if they’re just padding the system, it’s not. See the battery oversell red flag.

Worked example: one battery, three situations

Same battery in each case: 13.5 kWh, $15,000 installed, no federal credit. These simple payback figures ignore rate changes and capacity fade, so they’re for comparison.

	Full retail net metering, no VPP	California net billing	New England with ConnectedSolutions
Main value	Backup only	Shifting low-value exports to evening	VPP payments (exports already near retail)
Annual bill value	About $0 (slightly negative from efficiency losses)	3,000 kWh shifted × about 32¢ net = about $970	About $0 from shifting
Annual program value	$0	$0 (unless DSGS or other program applies)	5 kW × $275 = about $1,375
Simple payback	Never, on money alone	About 15 years	About 11 years

Notes on the assumptions:

• California: each stored kWh gives up a 5-cent export and offsets 0.89 kWh at an assumed 42-cent evening rate: 0.89 × 42¢ − 5¢ ≈ 32¢. A household that qualifies for SGIP at roughly $1,100 per kWh could have most of the battery cost covered, which changes the answer completely.
• New England: ConnectedSolutions rates lock for 5 years. After that, the payment could change, so the 11-year figure assumes the program continues at a similar level.

The lesson: the same battery can be a reasonable investment, a slow one, or purely an insurance purchase, depending entirely on local rules. Model yours in the battery calculator or compare with and without a battery in compare options.

Bottom line: If your battery’s payback is longer than its warranty, you’re mostly buying backup power. That can be a fine decision, but make it knowingly, and compare it with a generator or portable power station first.

Warranties, throughput and degradation

Battery warranties have two limits, and the first one reached ends coverage:

• Years, usually 10 to 15.
• Energy throughput, measured in megawatt-hours (MWh) or cycles.

They also guarantee only a minimum retained capacity at the end, commonly 60% to 70%.

Examples, as of October 2026 (always confirm on the current warranty document):

Battery	Warranty years	End-of-warranty capacity	Throughput limit
Tesla Powerwall 3	10	70%	Unlimited cycles with solar self-consumption, per manufacturer (check terms)
FranklinWH aPower 2	15	Check datasheet	60 MWh
Enphase IQ Battery 5P	15	60% per manufacturer (check)	6,000 cycles per manufacturer (check)
SolarEdge Home Battery	10	70%	About 22.4 MWh per manufacturer (check)

What this means in practice:

• Throughput math: FranklinWH’s 60 MWh on a 15 kWh battery equals about 4,000 full cycles. Cycling fully once a day, that’s roughly 11 years, before the 15-year term ends.
• Capacity fade: a 13.5 kWh battery guaranteed at 70% after 10 years could be down to about 9.5 kWh usable. Your savings shrink along with it.
• VPP use counts. Grid dispatch adds cycles. Check whether the VPP’s usage can exhaust your throughput warranty faster, and whether the manufacturer treats VPP cycling differently.

More on comparing models in best home batteries, and on warranties generally in solar panel lifespan and warranties.

Leases, PPAs and batteries

Lease and PPA providers can still claim a federal credit on batteries (under Section 48E), and storage gets the full credit for projects starting construction through 2033, subject to foreign-sourcing rules. That can make a leased battery or a solar-plus-storage PPA look cheaper than buying. Read the contract carefully: who controls the battery, whether the provider can enroll it in a VPP and keep the payments, and what happens when you sell the house. See lease vs buy vs PPA vs loan.

Questions to ask before buying a battery

• What is my export credit, and how much will this battery shift each year?
• What is the payback without any rebate, and with it? Is the rebate confirmed or just expected?
• Which circuits will be backed up, and can it start my AC or well pump?
• What are the warranty’s year, throughput and capacity limits?
• If I join a VPP, who gets the payments, and how many cycles will it use?
• What’s the price of the solar system alone, without the battery?

If the answers don’t add up, compare the offer in the quote comparison tool and see the battery oversell red flag for common pitches to watch for.