What is Solar Battery Storage?

Solar battery storage systems allow you to store excess electricity generated by your solar panels for use when the sun isn't shining. Instead of sending surplus energy back to the grid, you can save it in batteries for nighttime use, cloudy days, or power outages.

With declining battery costs and rising electricity prices, home energy storage has become an increasingly attractive investment for homeowners with solar panels. This comprehensive guide will help you understand whether battery storage is right for your home and which system best fits your needs.

How Does Solar Battery Storage Work?

A typical solar-plus-storage system works in the following cycle:

• Morning (Low Solar): Solar panels begin producing as sun rises. Home draws from grid or battery until solar production exceeds demand.
• Midday (Peak Solar): Panels produce maximum energy. Home uses solar power directly while excess charges the battery.
• Afternoon (Charging Complete): Once battery is full, excess solar is exported to grid (if net metering available).
• Evening (No Solar): Home draws power from battery first. Grid supplements if battery is depleted.
• Night (Standby): Battery may continue powering home or reserve capacity for emergency backup.

Key Battery Terminology Explained

• Capacity (kWh): Total amount of electricity a battery can store. A 10 kWh battery can provide 10 hours of 1 kW usage.
• Usable Capacity: Actual energy available. Most batteries reserve 10-20% to protect battery health.
• Power Rating (kW): How much electricity can be delivered at once. A 5 kW battery can run 5,000W of appliances simultaneously.
• Depth of Discharge (DoD): Percentage of battery that can be used. 90% DoD means 10% always remains reserved.
• Round-Trip Efficiency: Percentage of energy retained through charge/discharge cycle. 90% efficiency means 10% loss.
• Cycle Life: Number of charge/discharge cycles before significant degradation. Quality batteries offer 4,000-10,000 cycles.
• Warranty: Typically guarantees 70-80% capacity retention over 10-15 years or specified cycles.

Types of Solar Batteries

1. Lithium-Ion Batteries (Most Popular)

Lithium-ion batteries dominate the residential storage market due to their high energy density, efficiency, and declining costs.

Lithium Iron Phosphate (LFP/LiFePO4)

• Safety: Most stable lithium chemistry, very low fire risk
• Longevity: 4,000-10,000+ cycles (15-20 year lifespan)
• Temperature Tolerance: Performs well in wider temperature range
• Cost: Lower cost per cycle due to longevity
• Used By: Tesla Powerwall 3, Enphase IQ Battery

Nickel Manganese Cobalt (NMC)

• Energy Density: Highest energy storage per volume
• Power: Excellent peak power delivery
• Cycle Life: 2,000-4,000 cycles typical
• Cost: Historically cheaper but prices converging
• Used By: LG RESU, older Tesla Powerwalls

2. Lead-Acid Batteries (Traditional)

The oldest rechargeable battery technology, still used in some off-grid applications.

• Pros: Low upfront cost, well-understood technology, easily recyclable
• Cons: Short lifespan (3-5 years), low DoD (50%), bulky, requires maintenance
• Best For: Budget off-grid systems, backup only applications

3. Flow Batteries (Emerging)

Uses liquid electrolytes pumped through a cell stack. Promising for long-duration storage.

• Pros: Very long cycle life (10,000+), non-flammable, scalable
• Cons: Low energy density, expensive, requires pumps
• Best For: Commercial/utility scale, not yet practical for residential

Top Solar Battery Systems Compared (2026)

Tesla Powerwall 3

• Capacity: 13.5 kWh usable
• Continuous Power: 11.5 kW (highest residential available)
• Peak Power: 22 kW for 10 seconds
• Round-Trip Efficiency: 90%
• Warranty: 10 years, unlimited cycles
• Price: $9,500 before installation
• Unique Features: Integrated solar inverter, stackable up to 4 units, excellent app

Enphase IQ Battery 5P

• Capacity: 5 kWh per unit (modular design)
• Continuous Power: 3.84 kW per unit
• Peak Power: 7.68 kW per unit (3 seconds)
• Round-Trip Efficiency: 96% (highest available)
• Warranty: 15 years
• Price: $5,000-$6,000 per unit installed
• Unique Features: Easily scalable, works with Enphase microinverters

LG RESU Prime 16H

• Capacity: 16 kWh usable
• Continuous Power: 7 kW
• Peak Power: 11 kW
• Round-Trip Efficiency: 94.5%
• Warranty: 10 years, 22.4 MWh throughput
• Price: $11,000-$13,000 installed
• Unique Features: Compact design, high capacity, proven reliability

Generac PWRcell

• Capacity: 9-18 kWh (modular 3 kWh units)
• Continuous Power: Up to 9 kW
• Peak Power: Up to 11 kW
• Round-Trip Efficiency: 96.5%
• Warranty: 10 years
• Price: $15,000-$20,000 installed (full system)
• Unique Features: Best whole-home backup, outdoor rated, Generac reliability

Franklin WholePower

• Capacity: 13.6 kWh per unit
• Continuous Power: 10 kW
• Peak Power: 15 kW
• Round-Trip Efficiency: 89%
• Warranty: 12 years
• Price: $13,000-$16,000 installed
• Unique Features: Weather-resistant, 200A whole-home backup

Battery Comparison Chart

Prices include typical installation costs and may vary by location.

How Much Does Solar Battery Storage Cost?

The total cost of a home battery system depends on capacity, brand, and installation complexity:

Cost Breakdown

• Battery Equipment: $5,000-$15,000 depending on capacity and brand
• Installation Labor: $2,000-$5,000 depending on complexity
• Electrical Upgrades: $500-$2,000 if needed (panel upgrade, critical loads panel)
• Permits: $100-$500
• Total Typical Range: $10,000-$20,000 per battery installed

Cost Per kWh of Storage

A useful metric for comparing batteries is cost per kWh of usable capacity:

• Budget options: $600-$800 per kWh
• Mid-range options: $800-$1,000 per kWh
• Premium options: $1,000-$1,200 per kWh

Federal Tax Credit for Batteries

The 30% federal Investment Tax Credit (ITC) applies to battery storage when:

• Installed with a new solar panel system (any charging source)
• Charged 100% by solar (even if retrofitted to existing solar)
• Stand-alone batteries qualify starting in 2023 under the Inflation Reduction Act

A $15,000 battery installation qualifies for a $4,500 tax credit, reducing net cost to $10,500.

Benefits of Solar Battery Storage

1. Energy Independence

With battery storage, you're less dependent on the utility grid. You can use your own solar energy around the clock, reducing how much electricity you need to buy.

2. Backup Power During Outages

Unlike solar-only systems that shut down during grid outages (for safety), solar-plus-storage systems can keep critical loads running. Depending on your battery size and usage, backup can last hours to days.

3. Time-of-Use Optimization

Many utilities charge higher rates during peak demand hours (typically 4-9 PM). With a battery, you can:

• Store cheap solar or off-peak electricity
• Use stored energy during expensive peak hours
• Save 20-40% on electricity costs in high-TOU areas

4. Maximize Self-Consumption

Without storage, excess solar goes to the grid (often at lower rates than you pay). With a battery, you use more of your own solar energy, maximizing the value of your system.

5. Reduced Demand Charges

For commercial customers or homes with demand charges, batteries can reduce peak power drawn from the grid, lowering monthly bills.

6. Grid Services Income

Some utilities and programs pay battery owners to participate in:

• Virtual Power Plants (VPP) - aggregate batteries for grid support
• Demand Response programs - reduce usage during grid emergencies
• Frequency regulation - provide grid stabilization services

Is Solar Battery Storage Worth It?

Battery storage makes financial sense in certain situations:

Strong Case for Batteries

• High TOU rate difference: Peak rates 2-3x off-peak rates
• No net metering: Export rates much lower than import rates
• Frequent outages: Value of backup power justifies cost
• High electricity rates: More savings potential from self-consumption
• EV ownership: Charge EV from stored solar instead of expensive peak power

Weaker Case for Batteries

• Good net metering: Full retail credit for exports reduces battery value
• Flat rate electricity: No TOU arbitrage opportunity
• Reliable grid: Backup power less valuable if outages are rare
• Low electricity rates: Longer payback period

Simple Payback Calculation

To estimate battery payback:

1. Calculate annual battery savings (TOU arbitrage + increased self-consumption)
2. Add backup power value (peace of mind is hard to quantify)
3. Divide net battery cost by annual savings

Example: $10,500 net cost ÷ $800 annual savings = 13-year payback. With outage value factored in, payback improves.

Sizing Your Battery System

Choosing the right battery size depends on your goals:

For Daily Cycling (Self-Consumption/TOU)

Match battery capacity to your evening/night electricity usage:

• Review utility bills for average daily usage (kWh)
• Estimate evening usage (typically 30-50% of daily total)
• Size battery to cover evening + morning usage (typically 8-15 kWh)

For Backup Power

Calculate based on critical loads and desired backup duration:

• Essential backup (lights, fridge, wifi): 5-8 kWh provides 12-24 hours
• Extended backup (add AC, cooking): 13-20 kWh provides 8-16 hours
• Whole-home backup: 20-40+ kWh needed, may require multiple batteries

Power Rating Matters Too

Don't just look at capacity. Power rating determines what you can run simultaneously:

• 5 kW: Basic backup (lights, fridge, outlets)
• 7-10 kW: Can run most homes including small AC
• 10+ kW: Whole-home backup including larger AC, EV charging

Installation Considerations

Location Options

• Garage (most common): Protected from weather, easy electrical access
• Exterior wall: Many modern batteries are outdoor-rated
• Basement: Cool temperatures extend battery life
• Utility room: Keep away from water heaters and furnaces

Electrical Requirements

• 200A electrical panel recommended (100A may work for smaller systems)
• Critical loads panel may be required for partial backup
• Transfer switch for grid-backup operation
• DC-coupled systems require compatible solar inverter

Permitting

Battery installations typically require:

• Electrical permit
• Fire department approval (varies by jurisdiction)
• Utility interconnection agreement update
• HOA approval if applicable

Conclusion: Should You Add Battery Storage?

Solar battery storage is becoming increasingly attractive as prices fall and capabilities improve. Consider adding batteries if:

• You want backup power for outages
• Your utility has unfavorable net metering or high TOU rates
• You want maximum energy independence
• You're installing a new solar system (easier to add batteries now)
• You have an EV or plan to get one

Ready to see how much solar energy you could store? Use our Solar Production Calculator to estimate your daily production, then size your battery system accordingly.