Is adding a battery to your rooftop solar worth it? Here’s how to decide

Canary Media’s Electrified Life column shares real-world tales, tips, and insights to demystify what individuals can do to shift their homes and lives to clean electric power. 

During a power outage or in the evening hours, a home battery can have your back. Working along with solar panels on the roof, batteries can store excess clean power for when you need it.

But that flexibility doesn’t come cheap. Installing a typical battery that stores 10 to 13 kilowatt-hours (kWh) costs $10,000 to $15,000, according to the clean energy marketplace, EnergySage. Contractors report that the No. 1 reason people decide not to buy home batteries is because they’re too expensive.

Luckily, there’s a generous 30 percent federal tax credit for solar and batteries that wrangles those costs down. Other incentives might be available to you too (more on that below).

But given the high upfront cost of batteries, they won’t make sense for everyone. So are they a good fit for you? And if yes, what are the different features to consider? Electrified Life will help you answer these questions and more in two parts: This week, we’ll dig into what exactly having a battery gets you so that you can decide whether it’s a worthwhile investment. Next week, in part 2, we’ll discuss in more detail what to know about battery systems themselves before committing — for example, their sizing, chemistries, and energy management. Let’s get started.

What’s sparking your interest in batteries?

Before you decide whether to purchase a battery, it’s important to think through why you want one to begin with. There are two main reasons for getting batteries, according to experts: the resilience they offer and the financial savings they can deliver over time.

In terms of resilience, a battery can supply backup power when the grid can’t. So as you weigh a battery’s pros and cons, it makes sense to think about how grid outages in your area do or could affect you. How frequent are they? How long do they last? And how much advance warning do you get?

Power outages can range from just annoying to life-endangering. Households on average in the U.S. experience 5.6 hours per year without grid power, but some can lose it for days, weeks, or even longer. Sometimes outages have lead time, as when grid operators shut off power in order to prevent deadly wildfires sparked by downed power lines. But the extreme weather increasingly prevalent in a warming world — from blistering heat waves to freezing winter storms — can also knock out power unexpectedly when it’s needed most, plunging homes into darkness and precarity.

A battery system that can isolate — or ​“island” — itself from the grid will cocoon you from these disruptions. For at least a few hours, it’ll be able to provide backup power to a few essential loads, keeping the internet up, phones charged, and food and medicine cool.

While a feeling of security and stability might not be quantifiable, avoided property damage is. For example, during intense storms, batteries can keep a sump pump running so a basement doesn’t flood: that can be an avoided cost of up to $25,000, according to EnergySage.

A typical battery system isn’t going to be big enough to back up your whole home though. A battery might be able to store 10 kWh of energy, but an average home uses 29 kWh every day, according to the U.S. Energy Information Administration. While you could buy enough batteries to supply that amount, it would likely cost $40,000 or more, says Emily Walker, the senior writer at EnergySage who leads its consumer education strategy.

A whole-home backup gas generator may cost less upfront than a solar-plus-battery system, but a solar-battery combo could save an owner money in the long term — up to $22,000 over 20 years, an EnergySage analysis found.

Does a battery make financial sense given local policy and rates?

The other important point to consider is whether a battery along with solar panels will help you break even faster on the overall investment than you would with solar alone. The answer depends on your local electricity rates and how much your utility will pay you for solar power you send to the grid.

If you live in one of the 34 states, Washington, D.C., or Puerto Rico that currently have mandatory net-metering policies, then a battery might not gain you a lot financially. Net metering allows customers to sell their excess solar energy to the grid at the retail electricity rate, earning them credits they can use on their bills. When their solar production is low, and they need to buy energy from the utility, the credits can cancel the costs, driving the electricity bill down to even $0. In effect, the grid is acting like a battery — so solar owners don’t have to buy their own.

But the landscape is changing. ​“We’re seeing that more and more states are transitioning away from net metering, which is only going to make batteries make more and more sense,” Walker said.

California, for example, has switched from net metering to a net-billing tariff that compensates new solar households much less for exported power. While California’s average residential retail electricity rate is about 32 cents per kWh, a solar owner might earn just a couple of cents per kilowatt-hour, said Barry Cinnamon, CEO of Cinnamon Energy Systems, a contractor in the state. ​“It’s like giving away the electricity.”

This policy change is driving customers to install solar-plus-storage systems at much higher rates, so they can use the excess energy they’re generating themselves — or send it to the grid when it’s worth more.

The value proposition for batteries only grows stronger when utilities implement time-of-use rates, which make grid power more expensive at certain times of the day when demand is greater.

With a battery, you can store power and use it later when the grid prices are really high, said Alex Bazhinov, founder and president of smart panel startup Lumin.

Take California utility Pacific Gas & Electric, which under some of its rate plans charges a peak rate of 20 cents or more per kWh in the late afternoon and evening. In PG&E territory, using solar with a battery instead of solar alone can allow customers to break even on their investment in nine instead of 10 years and rack up savings of more than $21,000 over 20 years, according to EnergySage.

So if you’re scoping out a solar-and-battery system, try to find out how the rate landscape affects the project’s payback time.

A battery can look even more attractive if you want to future-proof your household against rising electricity costs, said Scott Murtishaw, executive director of the California Energy Storage Alliance. ​“If rates do increase or time-of-use rates end up becoming required … then [by getting batteries], you’re protecting yourself against increases in peak rates in the future.”

What incentives can you tap into for your battery purchase?

Finally, you’ll want to make sure you take advantage of any available battery incentives, which can completely change the cost equation. The 2022 Inflation Reduction Act’s 30 percent uncapped federal tax credit is ​“terrific,” Cinnamon said. ​“If the system is $40,000, now the tax credit brings the price down to $28,000.” And if you can’t use the credit all in one year, it’ll roll over to future years.

Some utilities offer battery rebates or pay you to send electricity back to the grid when it’s stressed as part of what are known as demand-response or virtual-power-plant programs. For example, Duke Energy in North Carolina offers a rebate for solar-plus-storage systems worth up to $9,000 as part of its PowerPair pilot program. Green Mountain Power in Vermont offers two batteries for a subsidized cost of $5,500. And National Grid says Massachusetts battery owners in its ConnectedSolutions program can earn an average of $1,500 per year if the utility can tap the battery when energy demand peaks. Other companies, like power retailer Octopus Energy in Texas, may also be able to enroll you in a virtual-power-plant program. So check with installers, your utility, and friendly neighborhood energy wonks to see what’s available in your area.

If you’ve got hefty incentives, the right rate environment, and a lack of net-metering, batteries could provide you with clean, resilient power without breaking the bank.

Stay tuned for the next installment of Electrified Life; there’s still a whole lot more to know about home batteries.