Your guide to home backup batteries in 2024

When you picture a battery, the first thing to come to mind is probably the disposable batteries you put in everyday appliances like your TV remote. But did you know you can power your entire house with (much larger) batteries?

Whether you frequently experience outages, are paying exorbitant electric bills, or simply want more energy independence, batteries can be a great investment for your home.

You don't need a home solar panel system to reap the benefits of batteries, but you'll get the most out of your system when you pair them together––especially if your utility doesn't pay you a lot for the excess electricity your solar panels generate and send to the grid. 

We explain how to decide if backup batteries are right for you and, if so, how to get a battery system that fits your needs at the best price.

Batteries store energy produced now for use later, providing flexibility for meeting your demand with supply. If you only have solar panels, any electricity they generate that you don't use goes to the grid. Batteries enable you to store that excess electricity instead so you can use it when your panels aren't producing enough to meet your demand.

For most battery systems, there's a limit to how much energy you can store in one system. To store more, you need additional batteries. And, in most cases, batteries can't store electricity indefinitely. Even if you don't pull electricity from your battery, it will slowly lose its charge over time.

Solar batteries: Produce & store energy at home

You don't need solar to install a home battery, but remember that batteries only store energy—they don't produce it. To truly increase your grid independence and your electric bill savings, you'll want to pair your battery system with a solar power system. Here's how it works: 

1. Your solar panels generate direct current (DC) electricity from the sun's energy.

2. The DC solar energy flows through an inverter (or multiple inverters), which converts it to alternating current (AC) electricity, the type of electricity that most home appliances use.

3. You run your home on this AC electricity. 

4. Any extra electricity you don't consume charges your batteries.

5. When the sun goes down or the power goes out, the energy stored in your batteries powers your home.

Home batteries vs. generators

Batteries aren't the only form of home energy storage. If you've experienced a power outage in the past, you may have already invested in a generator.

But home backup batteries are becoming an increasingly popular choice over home generators. They offer many of the same backup power functions as conventional generators without the need for refueling. While they're more expensive upfront and require an electrician to install, when paired with solar panels, you can "refuel" them for free with the sun's energy. They're also much quieter than generators and don't come with emissions-related health concerns. 

Most batteries last about 10-15 years, meaning you'll have plenty of time to break even on your investment. While many homeowners can benefit from installing a battery system, they're not right for everyone. Here are a few questions to answer when deciding if you should add a battery to your home:

 Do you frequently experience power outages?

Power outages are an occasional nuisance for everyone, but for some people, they're a far too regular occurrence: According to the Energy Information Administration, in 2021, the average U.S. electricity customer experienced 7 hours of electricity interruptions across fewer than two interruption events. However, customers in Louisiana and Oregon averaged over a day in cumulative outage time in 2021.

A solar-plus-storage system is likely a worthwhile investment if you're experiencing prolonged power losses multiple times each year. Unfortunately, your solar panels alone won't power your home during an outage because it's a safety risk to utility workers. 

When you install a solar-plus-storage system with islanding capabilities (meaning it has the proper equipment and wiring to automatically disconnect from the grid during a power outage), you can continue running your home, even when the grid goes down.

Does your utility company offer net metering?

If you have a solar panel system, when the sun's shining, it will likely produce more electricity than you need. Many states have a solar policy called net metering, in which you receive credits from your local utility company for the excess electricity you send to the grid.

After the sun sets or on a rainy day when your panels aren't generating enough energy, you'll pull electricity from the grid, which will count against the credits you've banked over time. At the end of your billing cycle, you'll only be billed for your "net" energy consumption (meaning your electric bills could be $0)!

However, a growing number of states are changing their policy to compensate you at a much lower rate for the electricity you send to the grid compared to what you pay when you pull from the grid. These new solar compensation rates are typically based on the avoided cost rate, or the price your utility company would pay to purchase this electricity elsewhere; sometimes, they're quite high, and other times, you barely receive any compensation for exporting electricity to the grid. 

Under these policies, you could still have a hefty electric bill even with solar. By pairing your solar panels with a battery, you can program your system to export electricity to the grid only when compensation rates are high and pull from your battery when rates are low, maximizing your savings.

Do you have TOU rates or demand charges?

Even if you don't have solar, batteries alone can be worth it if your utility uses a complex electricity rate structure. Time-of-use, or TOU, rates are a form of "time-varying rates" designed to better reflect the actual cost of electricity based on the amount of supply and demand. Utilities have used TOU rates for businesses for many years, but they're becoming an increasingly common way to charge homeowners. Under TOU rates, your cost of electricity will vary from hour to hour, day to day, and season to season. With a battery, you can use your stored energy to avoid pulling electricity from the grid when it costs the most. 

Demand charges are also common for businesses and are becoming more common for homeowners. With demand charges, your utility company tracks your maximum energy pull from the grid during any given hour (or even fifteen-minute period) per month and charges you based on that maximum demand for the whole month. With a battery, you can lower your peak demand from the grid, driving significant bill savings. 

Are there local incentive programs available to you?

If you want to install a home battery but are overwhelmed by the cost, don't worry: Plenty of incentives are available that will significantly lower the price. Depending on where you live, you could break even on your storage investment in less than a year! Here are some of the top battery incentives that will either reduce your upfront cost or increase your long-term savings:

Bottom line: Will the savings outweigh the costs?

In 2024, a 10 kWh battery costs about $8,000 after the federal tax credit based on thousands of quotes through EnergySage.  This price tag is high, but if you've determined that a battery is right for you based on your answers to the questions we outlined so far, it will pay off over time. 

For example, if you're a California homeowner looking to go solar, your utility will put you on a particular TOU rate plan, and you won't have access to net metering, making you a great fit for a home battery. By installing a solar-plus-storage system instead of a solar-only system in California, you could save $21,600 to $43,900 more over 20 years. So despite the higher upfront costs, you break even on your investment 1-2 years sooner.

But if you live somewhere with net metering and a flat, non-time varying electricity rate, the only financial savings from installing energy storage come from avoiding outages or receiving any available state incentives. In those instances, you won't see any more bill savings from adding a battery to your solar panel system. 

If you're ready to install a home battery system, we're here to help. Here's how to get started without feeling overwhelmed: