Solar battery incentives and rebates

If you're considering investing in energy storage, there are valuable incentives and rebates available that can help lower your costs, just as there are for solar energy. From federal incentives and state rebates to utility programs and solar-adjacent incentives, here are a few storage incentives that can help reduce the costs of installing a battery.

As a reminder, at EnergySage, we're solar and storage experts, not tax experts. Tax codes are complicated, so please consult your tax advisor for a final determination of whether you'll be eligible to receive tax incentives for solar and storage.

The best incentive for storage is the federal investment tax credit (ITC). The exact same ITC that provides a 30% credit for the cost of your solar system provides that same benefit to storage systems if they meet certain conditions. 

Thanks to the Inflation Reduction Act (IRA), all residential storage systems over 3 kilowatt-hours (kWh) in size are eligible for a 30% tax credit when purchased through 2032. For a typical home energy storage system, the IRA can reduce the cost of your system by $3,000 to $5,000.

For commercial properties, the Clean Electricity Investment Credit (CEIC) offers a credit of up to 50% of the project cost for battery storage installations. The credit starts at six percent and increases if the project meets specific requirements, such as US-based materials or located in an energy community. The CEIC replaced the IRA in 2025 as a tech-neutral and flexible solar incentive.

Increasingly, a number of states now also offer energy storage rebates to encourage the growth of the storage industry. These incentives typically take one of two forms: an upfront rebate or a performance-based incentive. Rebate programs are exactly what they sound like: states provide a direct cash payment after your battery is installed and connected to the grid. To date, state-level performance incentives for storage have typically been added to solar incentives.

Here are a few state level battery storage incentive examples:

California

Perhaps the best-known state-level storage incentive in the U.S. is California's Self-Generation Incentive Program (SGIP), which provides a dollar per kilowatt ($/kW) rebate for the energy storage installed. While the rebate level steps down as more homes and businesses add storage in California, in 2020, the state updated SGIP to provide more funding and higher levels of incentives for customers in high fire threat districts and for low-income customers to help provide emergency backup power to those that need it most.

Connecticut

Eversource and United Illuminating customers can benefit from the Energy Storage Solutions program in Connecticut. Residential customers earn up to $16,000 per installation plus more incentives as you send energy to the electric grid. Businesses receive a 50% upfront incentive when connected to the grid and used to help reduce grid stress during the summer. Plus, businesses can earn performance-based incentives twice a year for 10 years depending on how much power the battery adds to the grid during peak periods.

Massachusetts

While Massachusetts is known for its SMART incentive program, the 2025 update hasn’t been released yet. In the meantime, you can still benefit from participating in the Mass Saves Connected Solutions program. It offers financial incentives and zero percent interest financing so you can reduce the cost of battery installation and support grid stability. 

New York

While the state of New York has significant policy targets for energy storage (3 gigawatts by 2030), and while there are plenty of incentives for commercial-scale storage, the only incentive currently available for homeowners in the state at present is for residents of Long Island. This program offers a similar rebate-style incentive to California's SGIP program, with the state currently offering a $250 per kilowatt rebate to Long Island residents. But this incentive won't last forever– as of early 2025, nearly 96% of the funds were already committed. 

As an example of how solar battery incentives can influence the cost you pay, let's take a Tesla Powerwall installation in California. You can read our article about the SGIP battery incentive for more in-depth information, but here's how the costs play out once everything is all said and done:

Especially in a state like California, rebates and incentives can save you significant money on a solar plus storage installation. As solar batteries only become more popular, it's likely that incentives like SGIP will continue to receive funding, and also will likely pop up in other states.

Beyond states taking steps to encourage greater adoption of energy storage technologies, some utilities are now also offering incentives to home and business owners who install storage. To date, most of these utility-specific storage incentives are in the Northeast, between the ConnectedSolutions program and Green Mountain Power's storage programs. 

The ConnectedSolutions program

Utility customers of Eversource or National Grid in Connecticut, Massachusetts, New Hampshire, and Rhode Island can participate in the ConnectedSolutions program, a demand response-style incentive that pays you an annual incentive for access to the stored energy in your battery. The incentive structure is designed with two key things in mind: first, it's designed to not pull from your battery if a major storm event is on its way so that you'll always have backup power when you need it; and, second, the incentive is designed to cover the cost of your battery in five years, meaning the incentive will ultimately pay you to have a battery over the ten years of the incentive program.

Green Mountain Power storage programs

While Vermont doesn't have any state-specific storage incentives, their primary utility–Green Mountain Power–has been a pioneer for residential energy storage in the US. In fact, Green Mountain Power offers a few different programs for energy storage: a bring-your-own-device program that provides a rebate for whatever battery you want to install (and up to $10,500 rebate), as well as a Tesla Powerwall lease program.