Solar Batteries: Benefits, Uses, and Cost

Whether it’s to use more of the clean energy their home solar panels are generating or to get through a power outage, home battery installations are on the rise. In some places, like California and Arizona, batteries can increase the savings someone gets from solar.

New ways to use batteries — like distributed or virtual power plants — can support homeowners, their neighbors, and the grid. A win-win-win.

But batteries aren’t right for every home, and connecting with a reputable installer is a key step in making sure one works for you. Here’s what you need to know.

Download the free Palmetto app to start working toward a $1,000 discount on a solar battery when you save energy at home.

How a solar battery works

When your solar panels generate more electricity than you need, without a battery, that electricity would flow back to the grid, where it could earn you bill credits.

Solar batteries — also called home batteries, backup batteries, and home energy storage systems — store electricity from solar panels (or the grid), and discharge it to your home or the grid.

Homes typically consume the most energy in the morning and night. Meanwhile, the most productive hours for solar power generation are midday into the afternoon.

With a battery, that excess electricity can be stored at home and used to run your home later instead of purchasing utility company power. If your battery is a backup battery, it can also power parts of your home during a blackout.

You can go solar with or without battery storage while interconnected to the energy grid. According to the Solar Energy Industries Association (SEIA), 40% of residential solar projects installed in 2025 included battery storage, up from 28% the year before.

Off-grid vs. grid-connected solar systems

The vast majority of residential solar systems are connected to the grid. In some places, batteries help unlock greater solar savings and in areas where the grid is particularly unreliable, a back up battery can add resilience to your home. 

In off-grid circumstances, batteries are essential if you want your solar panels to power your home around the clock. When designing an off-grid system, you may need to oversize your battery storage to make it through multi-day stretches of bad weather.

Backup vs. arbitrage batteries

Most residential solar batteries are installed as backup batteries. Backup batteries let you store power and send it to the grid, use it at home to save money, or get through a blackout. 

Arbitrage batteries, also called consumption-only batteries, only store and sell power to the grid and can’t be used for home backup power. Arbitrage batteries may make sense in locations where the credits you get for sending electricity to the grid are lower than the price you pay for electricity.

Solar battery benefits

Adding solar battery storage to a solar panel system delivers four key benefits: independence, savings, environmental friendliness, and energy resilience.

Energy independence

Adding a battery enables you to decide when your solar power is used, stored, and shared. This can help you keep the lights on, decrease utility bills, and minimize your carbon footprint.

Savings on utility bills

By drawing power from your battery, you can avoid using utility power outside of solar production hours. This can be important if you have a time-of-use rate where batteries can help you avoid costly electricity during peak billing hours.

Cleaner energy at home

By keeping and using more of your solar energy, you can avoid the carbon emissions associated with other energy sources. About 55% of grid energy in the US was generated by fossil fuel resources in 2025.

Energy security during power outages

Backup batteries can improve your energy security and family’s safety by providing electricity through power outages. Solar panels can refill the batteries when the sun comes out and provide a quieter, cleaner alternative to a backup generator.

Credit: Climate Central

According to Climate Central, the number of weather-related power outages in the US in 2014-23 was approximately double the amount in 2000-09.

Consider the February 2021 winter storm which caused power outages for over 4 million Texans. In addition to losing power, some customers were left with massive utility bills, because when access was restored, electricity rates rose more than 7,000% in a matter of days.

Solar battery costs: Are they worth it?

Battery prices have fallen rapidly in the last decade, but home solar batteries still require substantial investment. Exact solar battery costs vary by manufacturer, installer, and project, and whether things like an electric panel upgrade are required. It can be most cost-effective to include battery storage as part of installing a new solar system rather than adding to a system years later. 

Other factors affecting cost are how much of your home you want to back up during an outage and how often. Your own budget, your area’s net metering plan, and how adding a battery impacts your upfront costs and solar payback period will help you determine if a battery is worth it to you. 

Financial incentives for home solar batteries

You may be eligible for several tax credits, rebates, or financing programs, depending on where you live and the equipment you install.

Tax credits

Several states offer state income tax credits for solar panels and home energy storage systems. While eligibility and credit values vary, state income tax credits exist in Arizona, Massachusetts, and New York.

Rebates and battery sharing incentives

You might be able to find state or utility-level incentives for batteries.

For example, Massachusetts, Mass Save Battery Storage Program participants can earn over $1,000 annually for sharing stored power with the grid during periods of peak electricity demand.

Duke Energy's PowerPair program rewards you when you install approved systems and let Duke control your battery during peak demand events.

Finding the right solar battery

Consider the following when you're looking for the right battery. You'll need professional installation and an installer can help match a battery to your needs and budget.

Capacity

A solar battery’s capacity is how much electricity it can store, measured in kilowatt-hours, or kWh. Remember most solar batteries can be stacked to increase your system’s total storage capacity.

Power output

Measured in kilowatts, a solar battery’s power output rating references how much energy it can deliver in one load, whether to your home or the grid. In general, the higher the output rating, the more devices you can power at the same time.

Depth of discharge (DoD)

A battery’s depth of discharge (DoD) is the maximum percentage of its capacity that can be used without the need to recharge. 

Draining a battery completely can damage it. The higher the DoD percentage, the more of your battery storage you can safely use.

A 10 kWh capacity battery with a 90% depth of discharge rating will discharge no more than 9 kWh (90% of 10 kWh) of the battery’s power before recharging.

Round-trip efficiency

Round-trip efficiency measures the percentage of energy you put into your battery that you can actually get out. While some energy will always be lost in the electricity storage and use cycle, several of today’s top solar batteries have round-trip operating efficiencies of 90% or higher.

Lifespan and warranty

Solar batteries slowly lose charging capacity and efficiency over time and charging cycles (one cycle = one charge and discharge). In general, solar battery lifespans are 5-15 years. 

For example of expected lifespan and warranty terms, a battery may come with a 10-year, 5,000-cycle warranty at 70% capacity. In this instance, the battery should retain at least 70% of its original capacity for up to 10 years or 5,000 charging cycles.

Solar battery types and materials 

In the US, lithium-ion batteries are the most common storage technology paired with home solar panels today.

Lithium-ion

Like batteries in your smartphone, laptop, or electric vehicle, many home batteries use lithium-ion technology. Many battery manufacturers are favoring lithium iron phosphate (LFP) technology for solar energy applications. Compared to non-lithium products, LFP and similar battery types typically come with increased upfront costs, but longer lifespans, greater round-trip efficiency, and the best long-term value.

Lead-acid

Similar to batteries in gas-powered vehicles, lead-acid systems are less efficient for storing and using solar electricity. Lead-acid batteries generally aren’t worth it for home solar when compared to lithium-ion alternatives.

Sodium-ion

Sodium-ion batteries are an emerging technology that has started to be used in some applications and could begin appearing in residential applications.

How home solar batteries work with the energy grid 

Solar panels are great at generating electricity, just not at night. With batteries that’s not a problem. Batteries can capture excess solar energy during the day and discharge it at night, to your home or the grid. Get enough batteries to work together and it can solve emerging supply and demand problems, like the duck curve. Battery storage sharing programs are often nicknamed virtual power plants.

Solar batteries can also help meet rising energy demand from data centers, manufacturing, and electrification without the need to build more expensive grid infrastructure than necessary.

Solar batteries can mitigate grid stress in two ways: by capturing excess solar power generation in the afternoon and offsetting utility energy consumption throughout the evening and overnight.

Solar battery savings: Net metering and time-of-use rates

When your solar power system sends excess electricity to the grid, your utility may add credit to your energy bills through a net metering or net billing program. The value of this bill credit will vary depending on where you live and often is less than what you pay for electricity.

For example, a utility might charge $0.12 per kWh for power drawn from the grid, but your net billing credits may be worth only $0.05 per kWh. In this case, battery storage could save you money by letting you avoid more grid energy ($0.12 savings) instead of earning bill credits ($0.05 savings).

In some places the value of those export credits varies throughout the day. A battery can let you store up energy to sell it when it's most valuable.

How to get a solar battery

Getting a home battery, whether paired with solar panels or not, requires professional help. Unless your battery is off-grid, you’ll likely need permission from your utility and permits from your city. A reputable installer can help you navigate those steps and get your battery installed safely. 

Palmetto can provide a free estimate based on your current utility bills and available incentives in your area. A solar advisor can walk you through your purchase, lease, or financing options and see if your home is a good fit for solar and storage. To get started, get a free savings estimate today. Or, download the free Palmetto app to learn more about how your home uses energy and start earning rewards that can take $1,000 off the cost of a home battery.

Solar battery FAQs

How much energy can a solar battery store?

Solar energy storage is measured in kilowatt-hours (kWh), with typical residential sizes being 5-20 kWh. To increase a system’s capacity, most solar batteries can be installed in banks.

Can solar batteries be recycled?

Yes, many materials in solar batteries are recyclable. Solar equipment recycling centers are becoming more common.

Where can I get the best solar battery?

A reputable solar company should work with you to get the best solar battery and the best overall system design for your home and energy needs. By having a professional supply and install your battery, you can guarantee warranties and complete local and utility legal requirements easier. Reach out to Palmetto to see how a battery could work for you.

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.