Bring your own battery (BYOB) programs: an overview

As solar batteries become more and more popular, individual utilities are beginning to offer rebate and incentive programs to make the economics of adding storage to your solar panel system more favorable. Given that solar batteries are a new product, utilities have begun experimenting with new program designs specific to solar batteries. One of the newest, increasingly common program types is a bring your own battery, or bring your own device, program.

Bring your own battery programs function quite simply: purchase a solar battery when you go solar, or to add to an existing solar panel system; connect that battery to your utility’s grid; and receive incentives. Generally speaking, bring your own battery programs work similarly to net metering, but are adjusted for the unique capabilities of energy storage. Utilities offering storage incentives through these types of programs will typically either pay you for your capacity–the amount of peak or continuous power your battery can output–or for the energy that you can push onto the grid–the amount of electricity you output, expressed in kilowatt-hours like your electricity bill. For a primer on energy storage terminology, check out our energy storage glossary.

While the prices of energy storage solutions have dropped significantly over the last five years, solar batteries may only make economic sense in select cases at present. However, utility rebate and incentive programs are helping solar shoppers to realize large savings from investing in a battery. In fact, some programs are being designed to make the payback period for a solar battery to be around five years, in line with or better than the payback period for investing in solar panels.

If you're planning to invest in a battery for the explicit purpose of participating in a utility bring your own battery program, be sure to check if your utility is offering one and if the battery you want can participate. Some bring your own battery programs are designed to narrow the choices of energy storage systems by limiting the participating batteries and battery manufacturers.

One example of a bring your own battery program in action is National Grid's ConnectedSolutions program. For customers in Massachusetts and Rhode Island, the utility provides a per kilowatt incentive for participating customers during both the summer and the winter. The incentive rate–$225 per kW or $400 per kW depending on where you live–is designed to pay for most or all of your battery in five years.

There are a few main reasons why utilities are beginning to offer bring your own battery programs. For these programs, in exchange for the rebate or incentive, utilities receive access to your solar battery. This means utilities gain the ability to dispatch your stored solar energy to help the grid at times when it is stressed and to help offset higher electricity prices. Aggregating solar batteries from existing customers provides an efficient, cost-effective way to reduce stress on the grid, and can help avoid the need for costly transmission upgrades or building new power plants.

Additionally, solar owners who also have batteries are likely to have a lower need for electricity from the grid overall. Even if you produce enough electricity to offset 100% of your monthly bill with your solar panel system, your consumption likely doesn't perfectly align with when your solar panels produce electricity. As a result, you'll still need to pull from the grid when the sun goes down every night. Solar homeowners with solar batteries, on the other hand, are able to pull primarily from their stored solar energy, and only from the grid as a last resort, further reducing stress on the grid.

Utilities aren't alone in offering incentives and rebates for solar batteries. Perhaps the single largest incentive is the federal solar tax credit. Also known as the investment tax credit (ITC), the federal solar tax credit is one of the best financial incentives for solar in the United States and is available to battery energy storage systems when paired with a renewable resource. It allows you to deduct 26 percent of the cost of a solar energy system–or solar plus storage system–from your federal taxes, and there's no cap on its value. The average EnergySage Solar Marketplace shopper saves several thousand dollars on the cost of going solar thanks to the ITC.

If you install energy storage on a residential property, it is eligible for a credit under the ITC – as long as an onsite renewable energy system like solar charges the battery. If you don't have solar panels and plan on charging the battery with electricity from the grid, then the battery is not eligible for the 26 percent ITC.

Adding energy storage technology to your home is a complicated process that requires electrical expertise, certifications, and knowledge of the best practices needed to install a solar-plus-storage system correctly. A qualified, EnergySage-approved company can give you the best recommendation about the energy storage options available to homeowners today. If you are interested in receiving competitive installation quotes for solar and energy storage options from local installers near you, join the EnergySage Marketplace today and indicate what products you're interested in when filling out your profile's preferences section.