The short version
- A home battery typically adds $10,000–$18,000 before incentives.
- Pure economics work best where export rates are poor or time-of-use spreads are wide.
- If your grid is reliable and your export rate is near retail, a battery rarely pays for itself on arbitrage alone.
- Backup power is a real benefit that does not show up in a payback calculation — price it honestly rather than pretending it is free.
What a battery actually does
A home battery stores surplus daytime generation so you can use it later instead of buying from the grid. Depending on how it is configured and wired, it does some combination of three jobs:
- Self-consumption. Store midday surplus, use it in the evening. Value = the gap between your import rate and your export credit.
- Rate arbitrage. Charge when power is cheap, discharge when it is expensive. Value = the size of your time-of-use spread.
- Backup. Keep some or all of the house running during an outage. Value = whatever an outage costs you, in money or in misery.
Note that backup requires specific wiring and a compatible inverter. A plain grid-tied solar array shuts down in an outage for the safety of line workers — which surprises a lot of new solar owners the first time the power goes out.
The first of those three is where your state does most of the work. Somewhere that still credits exports at full retail, storing power to avoid selling it saves you nothing. Somewhere that pays a fraction of retail — California under NEM 3.0 being the largest example — the same battery is capturing a real spread on every kilowatt-hour it keeps at home.
When the economics work
The case for a battery strengthens with each of these:
- A poor export rate. If exports earn far less than imports cost, every stored kilowatt-hour captures the difference. See net metering explained.
- A wide time-of-use spread. A large gap between peak and off-peak pricing gives a battery something to arbitrage against.
- Demand charges. Uncommon residentially, but where they exist a battery can shave the peak that sets them.
- Storage-specific incentives. Some states and utilities pay for batteries directly, or for making them available to the grid during peak events.
And weakens with each of these:
- Full retail net metering — the grid is already acting as a free, lossless battery.
- A flat electricity rate with no time-of-use variation.
- A reliable grid where outages are rare and short.
- Low overall consumption, which limits how much a battery can ever save you.
Sizing, briefly
Batteries are specified by usable capacity in kWh and continuous output in kW. Capacity determines how long you can run; output determines what you can run at once.
| Goal | Typical usable capacity | Notes |
|---|---|---|
| Essentials backup (fridge, lights, internet, a few outlets) | 5 – 10 kWh | Needs a critical-loads subpanel |
| Evening self-consumption | 10 – 15 kWh | Covers a typical evening peak |
| Whole-home backup, short outages | 15 – 30 kWh | Air conditioning drives this up quickly |
| Multi-day resilience | 30 kWh+ | Usually cheaper to pair a smaller battery with a generator |
Air conditioning and electric resistance heating are the loads that break backup budgets. If you want to run either through an outage, say so early — it changes the design, not just the size.
Lifespan and warranty
Home batteries are typically warrantied for around ten years or a stated throughput, whichever comes first, with a guaranteed remaining capacity at the end. Read that guarantee: "70% capacity at ten years" means the battery you are buying is expected to hold noticeably less by the time your panels are barely middle-aged.
Panels commonly outlast batteries by fifteen years or more. Factor a replacement into any long-run comparison, or you are comparing a 25-year asset against a 10-year one.
Deciding honestly
Two questions, answered separately:
- Does it pay?Ask your installer for the annual saving in dollars, and how they calculated it. Divide the installed cost by that figure. If the result exceeds the warranty period, it does not pay on economics alone.
- Do you want it anyway?If you lose power several times a year, work from home, keep medication refrigerated or have a well pump, backup has real value. That is a legitimate reason to buy — it just is not a payback calculation, and nobody should dress it up as one.