Home battery installations climb despite loss of federal incentives

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Last fall, as generous federal incentives for consumer cleantech were set to expire, people raced to lock in good deals on EVs and rooftop solar. Then, this year, sales cratered.

But home batteries bucked the trend. Federal tax credits for residential storage expired at the end of last year, prompting record sales in Q4 of 2025 — and then sales climbed even higher in the first quarter of 2026, per a BloombergNEF analysis of U.S. Energy Information Administration data. Homeowners installed a total of 673 megawatts of battery storage in Q1 of this year.

A few factors explain the market’s resilience. There’s the zeitgeisty reason: Across the nation, utility bills are high and rising, and batteries, typically paired with rooftop solar, offer people the ability to radically reduce their reliance on the centralized grid. There’s also the wonky explanation: State policies meant to spur home battery adoption are now doing just that.

Adoption is highest in the states where these factors — high electricity costs and supportive policy — coincide. California has since 2023 incentivized households to pair storage with solar, and in both 2024 and 2025 the state accounted for around three-quarters of home battery installations nationwide. Meanwhile, Hawaii, which has the highest electric bills in the country, created a new storage incentive program last year that resulted in a surge of installations in Q1 of this year, per BNEF.

The rising adoption comes even as the rooftop solar market struggles. Last year’s Republican tax and spending bill, the One Big Beautiful Bill Act, eliminated long-standing tax credits that knocked 30% off the price of both rooftop solar and storage systems. As a result, BNEF expects that this year residential solar installations will fall to their lowest level since 2020.

The stubborn growth of residential energy storage is another reminder that batteries are fast becoming a critical part of the U.S. electricity story. Large-scale batteries, for which Republicans actually preserved tax credits in last year’s law, are being built at a blistering pace. Expect home battery adoption to keep climbing, too.

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