Home Battery Backup Guide: Cost, Benefits, and Capabilities

The benefits of home solar panels — energy bill savings and a reduced carbon footprint, to name two common ones — are well established. Now, more and more homeowners are turning to battery backup. With or without solar panels, batteries can increase a home’s energy security and (in some cases) increase solar savings.

Not every home is a good fit for a backup battery just yet, but that number is increasing. Here’s what you need to know about backup batteries, before you talk to a trusted installer.

Home battery backups in 2026

Home battery backups are being paired with home solar panels more frequently than ever. This momentum is largely due to diminishing product costs, and battery prices are expected to continue falling through the end of the decade, according to research from the National Laboratory of the Rockies.

In the US, 14% of new solar systems had energy storage backup included in 2023. In 2025, that number reached 40%, according to the Solar Energy Industries Association.

Download the free Palmetto app and start earning rewards toward a $1,000 discount on a home battery when you save energy at home. 

How a home battery backup system works

Battery backup for home can operate in several different ways, depending on whether or not you have solar panels and if your property is connected to the grid.  

1. Solar panels with backup batteries: Batteries can be charged with solar power during the day and then discharged to your home at night to limit your property's consumption of grid electricity. If your battery is fully charged and your solar panels are still producing electricity, the excess power will be sent to the grid and often earn bill credits. 
2. Off-grid solar batteries: If your home is not connected to the utility grid, a battery backup is the only way to capture all of the electricity your panels produce throughout the day.
3. Standalone home batteries: Even without solar, some homeowners find installing battery backups may be worth it to store electricity in case of a grid power outage. Batteries can be used both as an alternative to and in conjunction with other home energy generators. 

Today’s home batteries give users full control over their energy storage and usage. Most home solar batteries are app-integrated, with intuitive monitoring and management controls that include several automated operating modes to help meet your energy goals.   

The benefits of solar panels with home battery backups

There are many financial, environmental, and lifestyle benefits of a solar and battery storage installation. 

Backup power during outages

Without a battery, grid-tied solar panels shut down to protect the equipment and workers repairing damaged power lines. By adding battery storage to solar panels, you can island, or temporarily go off-grid, to run your critical devices with stored energy.

Solar power systems with backup storage give you highly dependable power in emergency situations. In 2022, a Lawrence Berkeley National Laboratory study found battery backup with solar could be reliable in most areas of the US for most times of the year during a long-term grid outage. 

Researchers found solar panels and energy storage would work to power the essentials (refrigeration, interior lighting, a few plugs, and well pumps) for a majority of homes affected by a lengthy power outage. Specifically, they found a 10kWh battery paired with solar could get virtually all homes through a three-day outage, if that home didn’t need its heating or cooling. The same storage size met 86% of the power load for three days if using heating and cooling.

The study found a 30kWh storage capacity could meet 96% of the power load during a 3-day outage, including heating and cooling. 

Just as critical, the study showed backup power remains effective through longer spans. In most circumstances, solar panels will recharge the battery. Therefore, with the 30kWh storage, the batteries could meet 92% of a home’s power load at day 10 of an outage.

Percentage of home power covered by battery backup in an outage

According to a 2022 Lawrence Berkeley National Laboratory study.

Greater energy independence

By consuming more of the solar power you generate directly onsite and offsetting ongoing grid electricity purchases, you’re reducing your reliance on your utility.  

More emission-free electricity at home

In 2024, just under 60% of electricity in the US was generated by natural gas, coal, or another fossil fuel. A battery can help you avoid dirty grid energy and consume more carbon-free electricity at home.

Expanded solar energy savings

In areas with time-of-use electricity rates, a home battery backup enables smarter utility energy purchases. Let’s say your utility charges 30 cents per kWh during peak billing hours (from 3-7 p.m.), and 10 cents per kWh throughout the rest of the day. If you need to run your dishwasher, EV charger, or another high-energy-demand appliance during peak hours, you can avoid paying premium prices by discharging your stored solar power. 

In areas without 1-to-1 net metering policies, like the net billing rates in California, Arizona, and Illinois, energy storage and smart consumption habits may also help you recover the costs of going solar more quickly than systems without a home battery.

Typical payback periods for residential solar under the net billing program for California’s big three utilities, the average payback period is estimated to be 10.7 years according to Wood Mackenzie in 2022. But the payback period of a solar-plus-storage system for a Southern California Edison customer could be just 7.5 years, according to the same 2022 analysis.

Participation in grid-sharing programs

Grid-sharing programs for home battery owners, like the ConnectedSolutions Battery Program in Massachusetts or the Renewable Battery Connect Program in Colorado pay homeowners directly for discharging stored power to the grid during peak-demand hours.

By tapping into a distributed network of customer resources, grid-sharing programs enable utilities to better balance power supplies throughout the day, while rewarding battery owners for their participation. Although programs vary across the country, participants in ConnectedSolutions with National Grid can earn an average of $1,500 per year, according to the utility.

Virtual power plants (VPPs) — what programs like this are often called — are becoming more common in the US. A VPP can also use smart thermostats, other smart home devices, and electric vehicles, to ease stress on the grid during peak demand.

Home battery purchasing considerations 

The ideal battery for you will align with your energy goals and budget. Let’s look at the two main motivators for home battery purchases.

Home energy backup: If you live in an area with frequent grid power interruptions, or simply like to be prepared, a backup battery can keep critical devices running. Work with a trusted professional to understand how much storage you need to meet your backup goals.

Long-term savings: You might install battery backup to increase your savings from going solar by capturing and using more of your solar energy production or selling it to the grid when it's most valuable. This won’t be a viable option in all locations.

How much does a home battery backup cost?

Solar backup battery cost is heavily dependent on the storage capacity you choose, and project expenses can be broken down into the following categories.

• Hardware: In addition to the battery itself, home power backups require balance-of-system (BOS) components, wiring, an inverter, and several small pieces of installation hardware. 
• Labor: Battery installations are typically performed in less than a day, and a licensed electrician is usually required for your system to be interconnected to the grid.  
• Permitting: Interconnection permits and building inspections will typically add a few hundred dollars to a solar battery installation.  
• Overhead: From manufacturers through the supply chain and at the installation level, variable expenses may be incurred in project overhead, marketing costs, and other fees factored into supplier prices.

As they become more common and manufacturing practices get better, battery prices will likely keep falling.

Battery leasing

If you want a backup battery, but don’t want to buy one, battery leasing may be an option. Instead of an upfront payment for the equipment and installation, leasing gets you the same battery and installation for predictable monthly payments. And, common maintenance or repair issues may be covered by those payments.

Cost details for residential storage

Breakdown of cost for residential storage. Source: National Laboratory of the Rockies

Financial incentives for home backup batteries

States, cities, and utilities may offer one-time rebates or ongoing rewards for home backup batteries, with values typically based on the system’s energy storage capacity. 

In North Carolina, Duke Energy gives a $5,400 rebate for battery storage, for qualifying lithium-ion batteries up to 13.5 kWh, and a $9,000 total rebate on a solar plus storage system. In California, the California Public Utilities Commission’s Self-Generation Incentive Program gives some customers a rebate of $1,000 per kWh of energy storage installed. 

Home battery backup pros and cons

Batteries can be a valuable addition to a home with or without solar, but won’t be cost-effective for every home.

Battery backup pros

Extra solar savings: In places where net metering credits are lower than the utility electricity rate, batteries can increase your savings by letting you avoid more utility electricity. Whether a battery can increase your savings is location-dependent.

Emergency electricity: During an outage, batteries can provide backup electricity to power your essential appliances and devices. Solar panels can refill your battery during an extended outage.

More clean energy: A battery can let you store clean solar power to use at night when the grid’s electricity is often the dirtiest.

VPP participation: You may be able to enroll your battery in a VPP and earn rewards for your participation.

Battery backup cons

Cost: Adding battery storage comes at a cost, but incentives at the state and local level may be available.

Capacity: Batteries are most likely to be cost-effective if they’re sized to only back up the essentials during an outage. You can install enough batteries to power your entire home but, depending on its size, it’ll cost you. 

Is a home battery backup right for you?

A home battery backup could be worthwhile if you live in an area with frequent outages. It’s also likely to make more sense in areas without one-to-one net metering programs. 

Depending on how highly you value having power through an outage, backup batteries may be worth the cost.

See what you could save by getting storage (with or without solar) with Palmetto. Start by estimating your solar savings or download the Palmetto app for fun and easy ways to save energy that can earn you discounts on a home battery.

Battery backup FAQs

What is the cost of a backup battery for solar?

According to the National Renewable Energy Laboratory in Q1 2022, the average residential solar backup battery cost was $17,139 for purchase and installation. Searching commercial sites gets you estimates starting at $9,000 and growing depending on installation costs and the number of batteries. A battery lease swaps the upfront cost for predictable monthly payments

How long will a backup battery last?

A 2017 study from the National Renewable Energy Laboratory found lithium-ion solar batteries have an average lifespan of 7-10 years. Smart usage and maintenance of your system may extend battery life.

Is battery backup necessary for home solar?

No. Battery backup is becoming more common, but many residential solar users do not have battery or storage as part of their systems. Without your own storage, grid-tied panels won’t produce electricity during outages. 

How long can a backup battery run my home?

A fully-charged 10kWh battery can run 86-100% of a home’s power load for a 72-hour span, according to one study. It depends on how many devices and systems are using power, especially the heating and/or cooling, and if the batteries are being recharged during this period.

What happens if I produce more solar power than I need?

If your home is connected to the grid and you’re located in a net metering area, any excess energy produced goes into the grid, and may earn you credit on your electricity bill. If you have energy storage with your solar power system, any excess energy can charge your battery first. This allows you to use stored power when energy usage exceeds production. Homeowners not connected to the grid often choose to increase their solar storage capacity to enable uninterrupted power regardless of weather or time of day.

If there is a power outage, will my power go out if I have solar panels?

If you add battery backup to your solar panel system, you’ll have access to backup electricity during an outage. If your solar energy system does not include a home battery, your power will go out in accordance with grid codes and mandatory inverter specifications.

Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.